💹 ROI Calculator
Calculate your return on investment, net profit and annualized ROI so you can compare investments held for different lengths of time.
Quick answer: ROI = (amount returned − amount invested) ÷ amount invested × 100. Turning $10,000 into $15,000 is a 50% ROI; over 3 years that is an annualized return of 14.47% a year.
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ROI Calculator inputs
Result
Return on investment
50%
14.47% a year over 3 years
| Amount invested | $10,000.00 |
| Amount returned | $15,000.00 |
| Net profit | $5,000.00 |
- Annualized ROI
- 14.47%
- Investment multiple
- 1.5×
The ROI formula
Return on investment measures how much you gained or lost relative to what you put in. It is the simplest way to compare the profitability of different investments, projects or purchases.
ROI = (Amount returned − Amount invested) ÷ Amount invested × 100%
Because a plain ROI ignores time, the calculator also gives the annualized ROI – the steady yearly compound rate that would produce the same result.
Annualized ROI = (Returned ÷ Invested)1 ÷ years − 1
Worked example
You invest $10,000 and three years later it is worth $15,000. Net profit is $5,000, so ROI = 5,000 ÷ 10,000 = 50%. Annualized, that is 1.51/3 − 1 = 14.47% a year.
Why annualizing matters
| Investment | Total ROI | Years | Annualized |
|---|---|---|---|
| A | 50% | 3 | 14.47% |
| B | 50% | 8 | 5.20% |
| C | 20% | 1 | 20.00% |
Investment C has the lowest total ROI but the best yearly performance.
Tips for an accurate ROI
- Include all costs – fees, commissions, repairs, taxes – in the amount invested.
- Include all income – dividends, interest, rent – in the amount returned.
- For investments with several deposits or withdrawals over time, an internal rate of return (IRR) is more accurate than simple ROI.
- Compare annualized figures against a benchmark such as an index fund or a savings rate.
ROI beyond investing
The same formula works for business decisions: a $2,000 marketing campaign that brings in $5,000 of extra profit has an ROI of 150%. Home improvements, training courses and equipment purchases can all be compared this way, as long as gains and costs are measured honestly.
Estimates for educational purposes, not financial advice.
Frequently asked questions
How do you calculate ROI?
Subtract what you invested from what you got back, divide by what you invested and multiply by 100. $2,000 invested that returns $2,600 has an ROI of (2,600 − 2,000) ÷ 2,000 = 30%.
What is annualized ROI?
It converts a total return into an equivalent yearly compound rate: (final ÷ initial)^(1/years) − 1. It lets you fairly compare a 50% gain over 3 years with a 30% gain over 1 year.
What is a good ROI?
It depends on risk and time. Broad stock market indexes have historically averaged roughly 7–10% a year over long periods, so an annualized ROI above that for similar risk is generally considered good.
Should costs be included in ROI?
Yes. Include purchase fees, commissions, taxes and any extra money you put in as part of the amount invested, and count dividends or rent received as part of the amount returned.