ROI Calculator
Measure how much an investment gained relative to its cost. Enter the amount you invested and its final value to see your net profit and return on investment (ROI) as a percentage — and, if you add a time period, your annualized return.
ROI is the simplest measure of an investment’s performance; the annualized figure makes returns over different holding periods directly comparable.
Return on investment
30%
- Net profit
- $1,500
- Annualized return
- 9.14%
Calculation Formulas
The total gain (or loss) expressed as a percentage of what you put in.
Example:
Turning $5,000 into $6,500 is a $1,500 gain → ROI = 1,500 ÷ 5,000 = 30%.
Converts total ROI into a per-year rate so investments held for different lengths of time can be compared. This is the same math as CAGR.
Key Figures
| Figure | Value | Description |
|---|---|---|
| Time matters | Annualize to compare | 30% in 1 year ≠ 30% over 10 years — annualized return makes them comparable. |
| Long-run stock average | ~7–10%/yr | A common historical reference point for “good” annualized returns at comparable risk. |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: July 2026
- Standard ROI definition
Return on investment is a widely used, standardized measure of profitability relative to cost.
- Annualized return (geometric mean)
The annualized figure uses the geometric-mean method (identical to CAGR), the accepted way to normalize returns across holding periods.
How to Use This Calculator
- Enter the amount you originally invested.
- Enter the final value (or total amount returned).
- Optionally enter how many years you held the investment for an annualized return.
- Read your net profit, ROI percentage, and (if provided) annualized return.
Frequently Asked Questions
How is ROI calculated?
ROI = (Final value − Amount invested) ÷ Amount invested × 100. For example, turning $5,000 into $6,500 is a $1,500 gain, or a 30% ROI.
What is the difference between ROI and annualized return?
ROI is the total return over the whole holding period, regardless of how long that was. Annualized return converts it to a per-year rate (the same math as CAGR), which lets you compare investments held for different lengths of time on equal footing.
What counts as a good ROI?
It depends on the risk and time frame. As a reference point, the U.S. stock market has historically returned roughly 7–10% per year on average over long periods, so an annualized return above that reflects strong performance for comparable risk.
Does ROI account for the time an investment was held?
Not on its own — a 30% ROI earned in 1 year is far better than the same 30% over 10 years. That is why this calculator also shows an annualized return when you enter the holding period.
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