ROI Calculator
This ROI calculator measures how much an investment earned relative to what you put in. Enter your initial investment and its final value, and you'll instantly see your net gain or loss in dollars and your return on investment as a percentage — the single most common way to size up whether a stock, rental property, business project, or side hustle paid off.
Add an optional holding period in years and the calculator also reports your annualized return: the steady yearly rate that would have compounded your starting amount into the final value. That's the number that makes fair comparisons possible, because a 50% gain earned in two years is a very different result from the same 50% earned over ten.
How it works
The calculator subtracts your initial investment from the final value to get your net gain (or loss), then divides that gain by the initial investment to express it as a percentage — your ROI. If you supply a holding period greater than zero, it also converts the total growth into an annualized return by asking: what constant yearly rate, compounded over that many years, turns the starting amount into the ending amount? Losses work the same way — the gain, ROI, and annualized figures simply come out negative.
Formula
Net gain is G = FV − P and return on investment is ROI = G ÷ P × 100, where P is the initial investment and FV is the final value. The annualized return over t years is r = ((FV ÷ P)1/t − 1) × 100, which is the compound annual growth rate (CAGR) of the investment. If the final value is zero, the annualized return is −100% — the investment was wiped out.
Worked example
Suppose you invest $10,000 and it grows to $15,000 over 3 years. Your net gain is 15,000 − 10,000 = $5,000, so ROI is 5,000 ÷ 10,000 × 100 = 50%. Annualized, that's (15,000 ÷ 10,000)1/3 − 1 ≈ 0.1447, or about 14.47% per year — meaning a steady 14.47% compounded for three years would have produced the same result.
This calculator is for informational purposes only, not professional advice. Results ignore taxes, fees, dividends, and the timing of interim cash flows. Consult a qualified financial advisor before making investment decisions.
Frequently asked questions
What counts as a good ROI?
It depends entirely on the time frame and the risk you took. As a benchmark, diversified stock index funds have historically returned roughly 7-10% per year before inflation, so an annualized return above that range beat the market and one below it lagged. A raw ROI figure means little without a time frame: 50% in one year is exceptional, while 50% over a decade works out to only about 4.1% per year.
What is the difference between ROI and annualized return?
ROI is the total percentage gain over the whole holding period, however long that was. Annualized return spreads that growth evenly across each year, with compounding. A 50% ROI sounds impressive, but over 10 years it is only about 4.1% per year — mediocre compared with historical stock market averages. Always check the annualized figure before judging a long-held investment.
Does ROI account for fees, taxes, or dividends?
Not automatically. This calculator compares only the two numbers you enter, so the result is as complete as your inputs. For a true total return, add any dividends, rent, or interest you collected to the final value, and subtract commissions, management fees, closing costs, and taxes. Skipping those adjustments is the most common way people overstate their real returns.
How do I compare investments held for different lengths of time?
Use the annualized return rather than raw ROI. Converting each investment to a per-year compounded rate puts a 3-year stock gain and a 7-year real estate gain on the same footing. Enter each investment with its own holding period in this calculator and compare the annualized figures — the higher per-year rate did more with your money, though risk and effort matter too.
Is annualized return the same thing as CAGR?
Yes, for a simple buy-and-hold investment. CAGR stands for compound annual growth rate, and it is exactly what this calculator computes when you enter a holding period: the smooth yearly rate that compounds the starting value into the ending value. The terms are used interchangeably; CAGR is just the more formal name you will see in finance writing.
What are the limitations of ROI for irregular cash flows?
Simple ROI assumes one lump sum in at the start and one value out at the end. If you added or withdrew money along the way — monthly deposits, a partial sale, periodic rent — it cannot tell you how hard each dollar actually worked. For those situations analysts use the internal rate of return (IRR), which weighs every cash flow by when it happened. Spreadsheet IRR or XIRR functions handle this well.