ROI Calculator
ROI Calculator
Work out the return on investment from what you put in and what you got back: the gain, the ROI percentage, the annualized ROI that makes investments of different lengths comparable, the multiple and the doubling time. Compare two investments side by side, in any currency.
Growth of the investment
ROI is the gain divided by the amount invested. Annualized ROI is the steady yearly rate that turns the amount invested into the amount returned over the time held, with compounding: (returned ÷ invested) to the power 1 ÷ years, minus 1. Months are counted as twelfths of a year and days as 1/365. Include every cost in the amount invested and every payout in the amount returned, such as fees, dividends or rent, for a true figure. Amounts work in any currency. The CSV, image and printed report contain the values you entered, nothing preloaded.
How to use this tool
Enter what you put in and what you got back. The amount returned is everything that came back to you: the sale price plus any dividends, rent or interest received along the way. Add how long the money was invested, in years, months or days, to get the annualized ROI. To weigh up two options, set Compare with to a second investment.
The figure people most often get wrong is the amount invested. It should include every cost of getting in and staying in, such as purchase fees, commissions, repairs or subscriptions. Leaving them out makes the ROI look better than it was.
What the calculation is doing
ROI is the gain as a share of what you put in: (returned − invested) ÷ invested. Turning 10,000 into 15,000 gains 5,000, which is half of 10,000, so the ROI is 50%. It is a ratio, so it works the same in any currency and at any scale.
Annualized ROI answers a different question: what steady yearly rate, compounded, would turn the same investment into the same result over the same time? It is (returned ÷ invested) to the power 1/years, minus 1. For 10,000 to 15,000 over 5 years that is 1.5 to the power 0.2, minus 1, or 8.45% a year. It is the same figure as the compound annual growth rate, CAGR.
Why the same ROI can be a good or a poor result
A total ROI hides time. 50% in 2 years is 22.47% a year, which beats most savings accounts by a wide margin; 50% in 10 years is 4.14% a year, which a savings account can match with far less risk. The annualized figure puts both on the same yardstick, which is why fund reports and investment comparisons quote returns per year.
Dividing the total ROI by the years gives a simple yearly figure, 10% for 50% over 5 years, but it overstates the true rate. Each year of growth builds on the last, so a steady 8.45% a year is enough to reach 50% in 5 years. The gap widens with longer periods and bigger gains: 100% over 10 years is 10% a year simple but 7.18% compounded.
Losses work the other way round. A 20% loss leaves 8,000 of 10,000, and getting back to 10,000 needs a 25% gain, because the gain is measured on the smaller amount. A 50% loss needs 100%. That lopsided arithmetic is why a large fall can take years to recover from.
Annualized ROI for common totals and holding periods
| Total ROI | 1 year | 3 years | 5 years | 10 years | 20 years |
|---|---|---|---|---|---|
| 10% | 10% | 3.23% | 1.92% | 0.96% | 0.48% |
| 25% | 25% | 7.72% | 4.56% | 2.26% | 1.12% |
| 50% | 50% | 14.47% | 8.45% | 4.14% | 2.05% |
| 100% | 100% | 25.99% | 14.87% | 7.18% | 3.53% |
| 200% | 200% | 44.22% | 24.57% | 11.61% | 5.65% |
A worked example you can check on paper
Take the starting example: 10,000 invested, 15,000 returned, held for 5 years. The gain is 15,000 − 10,000 = 5,000, and the ROI is 5,000 ÷ 10,000 = 0.5, or 50%.
To annualize, divide the amounts: 15,000 ÷ 10,000 = 1.5. The fifth root of 1.5 is 1.08447, since 1.08447 multiplied by itself five times gives 1.5, so the rate is 8.45% a year. A calculator key for powers does this as 1.5 to the power 0.2.
As a check, grow 10,000 by 8.45% a year: it passes 10,845, 11,761, 12,754, 13,832, 15,000, landing on the amount returned. Adding a flat 1,000 a year instead also ends at 15,000, but it runs above the curve in every year in between, 11,000 against 10,845 after the first year, which is why the simple 10% overstates the rate.
Mistakes that catch people out
Leaving costs out. Fees, commissions, taxes and upkeep all belong in the amount invested. A rental that sold for a big gain can have a modest ROI once repairs and agent fees are counted.
Comparing totals across different time spans. 40% over 8 years is 4.3% a year and 25% over 2 years is 11.8% a year. Compare the annualized figures.
Dividing by the years. 50% ÷ 5 = 10% a year is a simple average, not a growth rate. Use the annualized ROI when comparing with an interest rate.
Ignoring money added or taken out. If you paid in or withdrew along the way, one ROI on the start and end amounts is misleading. Count contributions in the amount invested for a rough figure, or use an internal rate of return for an exact one.
Annualizing a very short gain. 3% in 90 days annualizes to 12.74% a year, which assumes the same result four times over. Treat annualized figures for a few weeks or months with care.
Popular calculations
Each opens the calculator with those amounts filled in, and they can be changed once it is open.
ROI over a number of years
Months and days
Losses
ROI without a time period
Comparing two investments
How this was checked
Every annualized figure was checked by compounding it back: the amount invested times one plus the rate, to the power of the years, returns the amount returned to the cent. Results were also compared with known cases, such as money doubling in 7 years at 10.41% a year and in 10 years at 7.18%, and with the rule of 72 as a rough guide.
Every address in the lists above was then opened and checked for a distinct title, the right figures, a chart that renders, and clean CSV, image and print output containing only that calculation, at desktop, tablet and phone widths.
Common questions
How do you calculate ROI?
Subtract the amount invested from the amount returned, divide by the amount invested and multiply by 100. Turning 10,000 into 15,000 gains 5,000, and 5,000 ÷ 10,000 = 0.5, so the ROI is 50%.
What is annualized ROI?
It is the steady yearly rate that, compounded, turns the amount invested into the amount returned over the same time: (returned ÷ invested) to the power 1/years, minus 1. A 50% ROI over 5 years is 8.45% a year.
What is a good ROI?
There is no single number, because risk and time matter as much as the percentage. The useful test is to compare the annualized ROI with what the same money could have earned elsewhere over the same years for similar risk, such as a savings account or a broad index fund.
How is ROI different from profit?
Profit is an amount and ROI is that amount relative to what you put in. A 5,000 profit is a 50% ROI on 10,000 but only 5% on 100,000, which is why ROI is the better way to compare investments of different sizes.
Can ROI be negative?
Yes. If you get back less than you put in, the ROI is negative, and losing everything is an ROI of −100%. Recovering takes a larger gain than the loss: after −20%, the remaining money must grow 25% to get back to where it started.
Is annualized ROI the same as CAGR?
Yes, for one amount in and one amount out they are the same compound annual growth rate. If money was added or taken out along the way, a single start and end figure is misleading, and a money weighted measure such as the internal rate of return, IRR, is the right tool.
Related Calculators and Reference
- Compound Interest Calculator: grow a sum at a rate, with regular contributions.
- Markup and Margin Calculator: the return on a single sale.
- Loan Payment Calculator: the cost of borrowing to invest, to set against the return.
- Percentage Calculator: ROI is a percentage change from what went in.
- Depreciation Calculator: how an asset's book value falls each year.
- Break Even Calculator: the sales volume a business needs before any return appears.
- Inflation Calculator: compare a return with the inflation over the same years.
- Present Value Calculator: discount future returns back to today.
- CAGR Calculator: the compound annual growth rate and the rule of 72 on their own.
- IRR and NPV Calculator: the annual rate when cash flows arrive in several years.
- Dividend Calculator: the income return on a dividend stock.
- FINRA: Calculating Your Investment Returns: ROI with fees and dividends, and why annualized returns matter.