ROI Calculator

Calculate ROI = (Return − Investment) / Investment × 100%. Enter invested amount, returned amount, and optional time period for annualized annual return rate.

Amount Invested ($)

Amount Returned ($)

Investment Length (for annualized ROI)

Start Date

End Date

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Guides & Reference

How It Works

Basic ROI calculationStocks, real estate, business investments, any financial return.

Enter amount invested and amount returned. ROI = (Return − Investment) / Investment × 100%. Net gain/loss displays prominently. Positive ROI shown in blue; negative in red. Example: invested $5,000, returned $6,500: net gain = $1,500, ROI = 30%.

ROI = (Return − Investment) / Investment × 100%

$5,000 invested, $6,500 returned → ROI = 30%, gain = $1,500

Annualized ROI (CAGR)Comparing investments held for different time periods.

Enter the time period in years (required for annualized rate). Annualized ROI = (Return/Investment)^(1/t) − 1. Example: 30% total ROI over 5 years: annualized = (1.30)^(0.2) − 1 = 5.39%/yr. Without time period, only total ROI shows.

CAGR = (Return/Investment)^(1/t) − 1

30% ROI over 5yr → CAGR = 5.39%/yr | 30% ROI over 1yr → 30%/yr

Comparing two investmentsPortfolio analysis, capital allocation decisions.

Run the calculator twice with each investment. Always compare annualized ROI (CAGR), not total ROI. $10k stock investment returning $18k over 7 years = 8.75%/yr CAGR. Same $10k in real estate returning $22k over 8 years = 10.37%/yr. Real estate wins on annual basis here.

Compare CAGR, not total ROI, for different time periods

$18k on $10k over 7yr=8.75%/yr vs $22k over 8yr=10.37%/yr

Business project ROICapital expenditure decisions, project evaluation.

For business investments, include all costs (equipment, labor, overhead) as the investment amount and all revenue generated as the return. Simple rule: if ROI exceeds cost of capital (typically 8-15% for businesses), the investment creates value. Payback period = Investment / Annual Return.

Include ALL costs and ALL revenue generated

$50k investment, $80k return over 3yr → ROI=60%, CAGR=16.96%/yr

Negative ROI analysisUnderstanding losses and recovery requirements.

Negative ROI shows how much was lost. Recovery from loss requires higher positive ROI: a −20% loss requires +25% gain to break even (0.8 × 1.25 = 1.0). The more you lose, the harder to recover. Calculator shows loss amount and recovery needed if ROI is negative.

Recovery from −x%: need +(x/(1−x))% to break even

−20% loss → need +25% gain to break even | −50% → need +100%

Quick Reference

Verify these in the calculator above.

Basic ROI

$5k invested, $6.5k returned

ROI = 30%

Annualized

30% ROI over 5 years

CAGR = 5.39%/yr

Doubling

Double your money in 10 years

CAGR = 7.18%/yr

Recovery

−20% loss recovery

Need +25% gain

Compound

S&P 500 avg 10%/yr, 20yr

$67,275 from $10k

Long term

$10k, $18k, 7yr

CAGR = 8.75%/yr

Severe loss

−50% loss recovery

Need +100% gain

Business

Good business ROI vs cost

Exceeds 8-15% hurdle

Tips & Shortcuts

✓

Always use annualized ROI (CAGR) to compare investments of different durations — total ROI is misleading across different time periods.

✓

A 100% ROI (doubling your money) over 20 years is only 3.53%/yr CAGR — not impressive. Use the annualized rate to see the real performance.

✓

For real estate ROI: include purchase price, renovation costs, and transaction fees as investment; include rental income + appreciation as return.

✓

Stock market average return of 10%/yr means $10,000 becomes $67,275 in 20 years (not $30,000). Compound annualized return is very different from simple interest.

✓

When ROI is negative, focus on the absolute dollar loss rather than the percentage. A −50% loss on $1,000 is $500; the same percentage loss on $100,000 is $50,000.

Common Mistakes

Comparing total ROI across different time periods

Investment A: 50% total over 10 years. Investment B: 30% total over 4 years. B is better annually (6.8%/yr vs 4.1%/yr). Always annualize before comparing.

Not including all costs in the investment amount

For real estate: add closing costs, renovation, and annual expenses to the investment. For stocks: add trading commissions and taxes on gains. Understating costs overstates ROI.

Confusing ROI with cash-on-cash return

Cash-on-cash return = annual cash flow / total cash invested. ROI = (total value − investment) / investment. For leveraged real estate, these differ significantly.

Ignoring taxes in the return amount

After-tax ROI is what matters. A 30% ROI with 30% capital gains tax gives 21% after-tax ROI. High-ROI investments in high-tax accounts cost more than tax-advantaged equivalents.

Using ROI to compare assets with different risk levels

A 15% ROI from a high-risk investment is not the same as 15% from a guaranteed bond. Adjust for risk using Sharpe ratio or compare to appropriate benchmarks.

Frequently Asked Questions

ROI (Return on Investment) = (Net Gain / Cost of Investment) × 100%. Net gain = return − investment. A $1,000 investment that returns $1,250 has ROI = (250/1000) × 100 = 25%. ROI measures efficiency of an investment regardless of the time period.

Annualized ROI (CAGR) = (Return/Investment)^(1/years) − 1. It converts any ROI to a per-year rate for fair comparison. A 25% ROI over 5 years = (1.25)^(0.2) − 1 = 4.56%/yr. A 25% ROI over 1 year = 25%/yr. Same total gain, very different annual rates.

It depends on the asset class and time period. Stock market average: 7-10%/yr (inflation-adjusted). Real estate: 8-12%/yr total return. Savings accounts: 4-5%/yr currently. Business investments: 15-30%+ expected. Risk and ROI are positively correlated — higher expected returns require accepting higher risk.

ROI measures return relative to investment cost. Net profit margin measures profit relative to revenue. $50k profit on $200k investment = 25% ROI. $50k profit on $500k revenue = 10% margin. Both matter — a business can have high margins but low ROI if the investment is large.

Yes. Negative ROI means you lost money. If you invested $1,000 and received $800, ROI = (800-1000)/1000 × 100 = −20%. The calculator shows negative ROI in red. When comparing investments, avoid those with negative expected ROI unless there are strategic non-financial reasons.

ROI is total return over any period. CAGR (Compound Annual Growth Rate) is the per-year rate that would produce that total ROI. CAGR = (Return/Investment)^(1/years) − 1. Use CAGR to compare investments of different durations on a per-year basis.

Always compare annualized ROI (CAGR), not total ROI. Investment A: 50% total ROI over 10 years = 4.1%/yr. Investment B: 30% total ROI over 4 years = 6.8%/yr. Investment B is better on an annual basis despite lower total return. Enter each investment separately and compare the annualized rates.

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