Return on Investment (ROI) Calculator
Return on Investment Calculator
The Return on Investment Calculator measures the profitability of any investment by calculating the percentage return relative to the amount invested. ROI is one of the most widely used performance metrics in finance because it is simple, intuitive, and applicable to virtually any type of investment, from stocks and real estate to business projects and marketing campaigns.
The simple ROI calculation tells you how much profit or loss you generated relative to your initial outlay. However, it does not account for the time period. A 50 percent ROI earned in one year is much better than the same return earned over five years. Annualized ROI, or CAGR, solves this by expressing the annual growth rate that would produce the observed total return.
The distinction between simple and annualized returns is critical for comparing investments with different holding periods. An investment that doubles over five years has a 100 percent simple ROI and 14.9 percent annualized. One that increases 50 percent over two years has a 50 percent simple ROI but 22.5 percent annualized, showing the second investment performed better per year.
Enter the initial investment amount, final value, any dividends or cash flows received, and the holding period in years. Press Calculate to see total gain, simple ROI percentage, and annualized ROI (CAGR).
For example, investing $10,000, receiving $500 in dividends, and selling for $13,000 after 3 years yields a $3,500 total gain, 35 percent simple ROI, and approximately 10.5 percent annualized ROI.
Growth of $10,000 at various annualized returns:
| Return | 5 Years | 10 Years | 15 Years | 20 Years | 30 Years |
|---|---|---|---|---|---|
| 5% | $12,763 | $16,289 | $20,789 | $26,533 | $43,219 |
| 7% | $14,026 | $19,672 | $27,590 | $38,697 | $76,123 |
| 10% | $16,105 | $25,937 | $41,772 | $67,275 | $174,494 |
| 12% | $17,623 | $31,058 | $54,736 | $96,463 | $299,599 |
| 15% | $20,114 | $40,456 | $81,371 | $163,665 | $662,118 |
Include all costs associated with the investment, including trading commissions, management fees, and taxes. A 1 percent annual fee reduces your ending portfolio value by 15 to 20 percent over 30 years. Always use annualized ROI for comparing investments with different holding periods.
Simple ROI ignores the time value of money and timing of cash flows. CAGR assumes returns compound smoothly, but actual returns are typically volatile. Past performance does not guarantee future results. Use IRR for time-weighted returns when intermediate cash flows occur.
- What is the difference between ROI and net profit?
- Net profit is absolute dollars. ROI expresses profit as a percentage of the investment. $10k profit on $100k = 10% ROI.
- How do I calculate total return with reinvested profits?
- Total Return = Initial Investment x (1 + ROI%)^n. The calculator shows both total return and CAGR.
- Is a negative ROI always bad?
- Not necessarily. Short-term negative ROI may be acceptable for R&D, brand building, or market entry.
- What is a good ROI percentage?
- Above 10% is solid for most investments. 20%+ is excellent. Low-risk: 5-15%. High-risk: aim for 25%+.
- What costs should I include in the investment?
- All upfront and ongoing costs: purchase price, setup, training, marketing, inventory, labor. Exclude sunk costs and overhead.
- Investopedia. "Return on Investment: What It Is and How to Calculate It." investopedia.com.
- Corporate Finance Institute. "ROI Formula and Calculation." corporatefinanceinstitute.com.
- Damodaran, A. "Investment Valuation." Wiley.
- CFA Institute. "Investment Performance Measurement." cfainstitute.org.
Last updated: May 12, 2026