ROI Calculator
Free online ROI calculator. Calculate return on investment, profit/loss and annualized returns for any investment. Instant results, no signup needed.
What is ROI?
Return on Investment (ROI) is a performance metric used to evaluate the efficiency or profitability of an investment. It's expressed as a percentage and represents the gain or loss on an investment relative to its cost. ROI is one of the most important metrics for investors and business owners to understand when comparing investment opportunities.
ROI Formula
The basic ROI formula is straightforward:
Understanding ROI Results
- Positive ROI — Your investment gained value. An ROI of 20% means you earned $20 for every $100 invested.
- Zero ROI — Your final value equals your initial investment. No gain or loss.
- Negative ROI — Your investment lost value. Negative ROI indicates a loss on the investment.
Annualized ROI Explained
Annualized ROI converts your return to an annual percentage, making it easier to compare investments with different time periods. This is calculated using the compound annual growth rate (CAGR) formula: CAGR = (Final Value / Initial Investment)^(1 / Years) - 1
What This Tool Can and Can't Tell You
This calculator compares your initial value with your final value over the time period you enter. It shows profit, total ROI, and annualized ROI. It does not model the path between those two points, so it cannot determine the exact date when your investment first crossed break-even.
Frequently Asked Questions
What's a good ROI?
A good ROI depends on the investment type and time period. Stock market averages around 10% annually. Real estate investors often target 8-12% yearly. Business investments might require 20%+.
How does inflation affect ROI?
Inflation erodes purchasing power. A 5% nominal ROI during 3% inflation means only 2% real return. Always consider inflation when evaluating long-term investments: Real ROI = Nominal ROI - Inflation Rate.
How do fees affect my ROI?
Investment fees, trading commissions, and taxes significantly impact net ROI. A 2% annual fee on a 10% gross return reduces your net return to 8%. Always factor in all costs when calculating real ROI.