ROI Calculator
Quick answer: Enter what you paid, what it's worth now, and how long you held it to get your ROI percentage and annualized return. Positive ROI = profit; negative ROI = loss.
Calculate the return on investment (ROI) for any purchase or investment. Enter the initial cost, final value, and optionally the number of years held to see simple ROI percentage and annualized (CAGR) return. Used for stocks, real estate, business investments, and any scenario where you want to compare returns.
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Last reviewed: April 2026Report an error
Return on Investment
50%
ROI: 50% (net gain: $5,000.00). Annualized return: 14.47% per year.
Net Gain/Loss
+$5,000.00
Annualized ROI (CAGR)
14.47%
Holding Period
3 years
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The Formula
ROI = (Final Value − Initial Cost) ÷ Initial Cost × 100
- Final Value = Value at end of investment
- Initial Cost = Amount originally invested
How to Use This ROI Calculator
- 1Enter the initial investment or cost.
- 2Enter the current or final value.
- 3Optionally enter the number of years held.
- 4Read your ROI percentage and net gain or loss.
- 5If years are provided, read the annualized return (CAGR).
Frequently Asked Questions
- ROI (Return on Investment) measures how much profit or loss an investment generated relative to its cost. The formula is: ROI = (Final Value − Initial Cost) ÷ Initial Cost × 100. A 50% ROI means you earned 50 cents for every dollar invested. It does not account for time — a 50% ROI over 1 year is much better than over 10 years.
- Annualized ROI, or CAGR (Compound Annual Growth Rate), normalizes returns across time periods so you can compare investments held for different durations. Formula: CAGR = (Final Value ÷ Initial Value)^(1/years) − 1. The S&P 500 has averaged roughly 10% CAGR historically (7% after inflation).
- It depends on the investment type and time horizon. The S&P 500 averages ~10% annually before inflation. Real estate averages 8–12% including appreciation and rent. CDs and bonds are lower but safer. Compare against relevant benchmarks, not a single universal threshold.
- Simple ROI does not. To find your real (inflation-adjusted) return, subtract the inflation rate from your ROI. If your investment returned 8% but inflation was 3%, your real return was roughly 5%.
- ROI measures return relative to investment cost and is used for investments and projects. Profit margin measures profit relative to revenue and is used for business performance. Both are ratios expressed as percentages but serve different analytical purposes.
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