ROI Calculator

ROI Calculator

Initial investment must be greater than zero.

ROI Calculator — Return on Investment

Return on Investment (ROI) measures the efficiency and profitability of an investment. Our ROI calculator instantly computes the total ROI percentage, net profit or loss, and — if you provide a time period — the annualized ROI (CAGR), giving you the complete picture of your investment's performance.

ROI Formula

ROI (%) = (Final Value − Initial Investment) ÷ Initial Investment × 100

For example, if you invested $10,000 and it grew to $15,000, your ROI is (15,000 − 10,000) ÷ 10,000 × 100 = 50%. If you held this for 3 years, the annualized ROI (CAGR) would be approximately 14.47% per year.

ROI vs. Annualized ROI (CAGR)

A raw ROI of 50% over 3 years sounds great, but how does it compare to a 30% ROI over 1 year? The annualized figure (CAGR — Compound Annual Growth Rate) makes time-adjusted comparisons possible. CAGR = (Final Value ÷ Initial Investment)1/years − 1. Always compare investments using annualized ROI, not total ROI, when time periods differ.

Business vs. Investment ROI

In business, ROI measures the return on money spent on marketing campaigns, equipment purchases, or operational improvements. In investing, ROI measures the gain on stocks, bonds, real estate, or business ownership. The formula is the same — only the inputs differ. For example, if a $5,000 marketing campaign generated $20,000 in revenue with $8,000 in costs, the net return is $12,000 and ROI is 140%.

Common ROI Benchmarks

  • Stock market (S&P 500): ~10% average annual return historically (7% after inflation)
  • Real estate: 8–12% annually depending on location and strategy
  • Savings accounts/CDs: 1–5% in current conditions
  • Business investments: Target 15–30% or higher to justify risk

Frequently Asked Questions

What is a good ROI?
It depends on the investment type and risk. For stock market investments, 7–10% annualized is considered solid. For businesses, a common benchmark is ROI above 15–20%. Always compare ROI to the risk involved and alternative opportunities.
Can ROI be negative?
Yes. A negative ROI means the investment lost money. If you invested $10,000 and it's now worth $7,000, your ROI is −30%. The calculator will show this in red.
What is CAGR and how is it different from ROI?
CAGR (Compound Annual Growth Rate) is the annualized return assuming growth compounded yearly. Total ROI just measures overall gain. CAGR normalizes for time, making multi-year comparisons meaningful.
Does this calculator account for taxes or fees?
No. This is a pure pre-tax, pre-fee ROI calculation. For net ROI, subtract taxes, transaction fees, and other costs from the final value before entering it.
Can I use this for real estate ROI?
Yes. Enter your total acquisition cost (purchase price + closing costs + renovation) as the initial investment and the estimated current market value (or sale price minus selling costs) as the final value. For rental ROI, factor in cumulative rental income in the final value.