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ROI Calculator

Updated January 2026

An ROI calculator helps you measure the profitability of any investment. See both your total return on investment and the annualized return (CAGR) to fairly compare opportunities with different time horizons.

How to Use This Calculator

Enter your initial investment amount, the final value of the investment, and the number of years you held it. Click Calculate to see your total ROI percentage, annualized ROI (CAGR), and total gain or loss in dollars.

How It's Calculated

Return on Investment uses a straightforward formula:

ROI (%) = [(Final Value − Initial Investment) / Initial Investment] × 100

For multi-year investments, the annualized ROI (CAGR) is calculated as:

Annualized ROI (%) = [(Final Value / Initial Investment)^(1/t) − 1] × 100

CAGR gives you the year-over-year growth rate, making it possible to fairly compare investments held for different periods.

Frequently Asked Questions

ROI (Return on Investment) is calculated as: (Final Value − Initial Investment) / Initial Investment × 100. If you invest $10,000 and it grows to $15,000, your ROI is ($15,000 − $10,000) / $10,000 × 100 = 50%. This simple formula works for any investment — stocks, real estate, business projects, or marketing campaigns. The key is accurately accounting for all costs and all returns.
A "good" ROI depends on the investment type and risk level. The historical average annual return for the S&P 500 is about 10%, making any long-term stock investment yielding 8–12% annualized quite good. Real estate typically yields 8–15% annualized depending on location and strategy. For business investments or marketing campaigns, many aim for 200–500% or higher. Always consider risk — a high ROI usually comes with higher risk of loss. Comparing ROI to a benchmark like the S&P 500 helps put returns in context.
ROI measures the total percentage return over the entire investment period, regardless of time. Annualized return (CAGR) adjusts for the time period to show the average yearly return. A 50% total return over 5 years sounds good, but the annualized return is only about 8.4% — much less impressive. Always use annualized return when comparing investments with different time horizons. This calculator shows both so you get the full picture.
For accurate ROI, include all costs associated with the investment: the initial purchase price, transaction fees and commissions, ongoing maintenance costs, taxes paid, any improvement or upgrade costs, and exit costs (selling fees, capital gains taxes). Missing costs inflates your ROI. For real estate, include closing costs, property taxes, insurance, maintenance, and management fees. For stocks, include trading commissions and any management fees.

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