ROI Calculator
Return on investment and annualized ROI from what you put in, what you got back and how long it took, with the work shown and ROI vs CAGR vs IRR explained.
ROI Calculator: with the default inputs, return on investment is 50%.
Everything you put in: purchase price, fees, improvements.
Sale proceeds plus any income received, net of selling costs — or the profit alone if you picked that above.
Decimal is fine: 18 months = 1.5. Used for the annualized figure.
- Annualized ROI
- 14.47%The constant yearly rate that compounds to the same total return (this is the CAGR).
- Net profit
- $5,000.00
- Final value
- $15,000.00
- Multiple on invested capital
- 1.5Final value ÷ invested. 2.0× means you doubled your money.
Assumptions
- One amount in and one amount out; interim cash flows are treated as part of the final value.
- Pre-tax, nominal (not adjusted for inflation).
| Years held | Annualized return | Reads as |
|---|---|---|
| 0.5 | 125% | Exceptional |
| 1 | 50% | Exceptional |
| 2 | 22.47% | Exceptional |
| 3 | 14.47% | Good |
| 5 | 8.45% | Good |
| 7 | 5.96% | Modest |
| 10 | 4.14% | Modest |
| 20 | 2.05% | Barely a return |
Every row is the same 50% total return on $10,000. Only the holding period changes — which is why an ROI quoted without one cannot be compared with anything.
How this is worked out
The formula
ROI = (final value − amount invested) ÷ amount invested × 100 Annualized ROI = (final value ÷ amount invested)^(1 ÷ years) − 1 Net profit = final value − amount invested
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Amount invested
- Everything you put in: purchase price, fees, improvements.in dollars · 0 or more · defaults to 10000
- The next number is…
- Choose one of 2 options.The total amount returned (final value) · The net gain or profit
- Amount returned
- Sale proceeds plus any income received, net of selling costs — or the profit alone if you picked that above.in dollars · 0 or more · defaults to 15000
- Holding period
- Decimal is fine: 18 months = 1.5. Used for the annualized figure.from 0 to 200 · defaults to 3
What you get back
- Return on investmentmain answer
- Annualized ROI
- The constant yearly rate that compounds to the same total return (this is the CAGR).
- Net profit
- Final value
- Multiple on invested capital
- Final value ÷ invested. 2.0× means you doubled your money.
What this assumes
- One amount in and one amount out; interim cash flows are treated as part of the final value.
- Pre-tax, nominal (not adjusted for inflation).
About this calculator
Return on investment is the simplest answer to "was it worth it?": what you got back, minus what you put in, as a percentage of what you put in. Buy for $10,000, sell for $15,000, and the ROI is 50%. It works for stocks, rental property, a marketing campaign, a piece of equipment or a training course — anything with a cost and a payoff you can put a number on.
Getting the inputs honest
- Amount invested should be all-in: purchase price plus commissions, closing costs, renovations, setup fees. Leaving these out is the most common way ROI gets flattered.
- Amount returned is what actually came back: sale price net of selling costs, plus any dividends, rent or savings collected along the way. If you know the profit rather than the total, switch the selector.
- Holding period turns the total into a yearly rate so you can compare a 3-year project with a 10-year one.
ROI vs. annualized ROI (CAGR) vs. IRR
Plain ROI ignores time. A 50% return sounds great until you learn it took twelve years — that's 3.4% a year, worse than a savings account in many periods. The annualized ROI is the compound annual growth rate: the steady yearly rate that would turn your investment into the final value over the holding period. For a single sum in and a single sum out, annualized ROI and CAGR are identical.
IRR (internal rate of return) generalizes this to investments with cash flows in between — rent every month, a capital call in year two, a dividend each quarter. It's the discount rate that makes all those flows net to zero. If your investment is one payment in and one out, use this calculator; if there are flows in between, IRR is the right tool and will differ from the number here.
Reading the results
- ROI is the headline total return.
- Annualized ROI is what to compare against alternatives — an index fund's long-run return, your mortgage rate, a bond yield.
- Multiple is how investors talk about it: 1.5× means you got one and a half dollars back for each dollar in.
Returns under a year are extrapolated when annualized; a great quarter doesn't guarantee a great year, and the calculator flags this. ROI is also pre-tax and ignores inflation and risk — two projects with the same ROI aren't equally good if one could have gone to zero.
Frequently asked questions
▸How do I calculate ROI?
Subtract the amount invested from the final value, divide by the amount invested, and multiply by 100. $15,000 back on $10,000 is (15,000 − 10,000) ÷ 10,000 = 50%.
▸What is a good ROI?
It depends on risk and time. The US stock market has averaged about 10% a year before inflation over the long run, so a multi-year investment should beat that to justify extra risk or effort. For a marketing campaign, 5:1 revenue to spend is a common target.
▸What's the difference between ROI and annualized ROI?
ROI is the total return over the whole holding period. Annualized ROI converts it to a per-year compound rate so investments of different lengths can be compared. A 50% ROI over 3 years is 14.5% annualized; over 10 years it's 4.1%.
▸Is ROI the same as CAGR?
Annualized ROI for a single investment with one payoff is exactly the CAGR. CAGR is the term used for growth of a value over time; ROI is broader and often quoted without annualizing.
▸When should I use IRR instead?
When money goes in or comes out at several points — monthly rent, staged funding, dividends. IRR accounts for the timing of each cash flow; simple ROI can't.
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