ROI Calculator – Calculate Return on Investment Online
Calculate return on investment, including annualized return.
About the ROI Calculator
What is the ROI Calculator?
An ROI calculator measures the profitability of an investment as a percentage of its cost, and annualizes it for comparison.
Why use this calculator?
ROI lets you compare very different investments on one scale. The annualized figure is especially useful because it accounts for how long the money was tied up.
How to use it
- Enter what the investment cost.
- Enter its final or current value.
- Enter how long you held it.
- See the total and annualized return.
Formula
ROI = (final value − cost) ÷ cost × 100; CAGR = (final ÷ cost)^(1/years) − 1.
ROI ignores the timing of cash flows and risk. For irregular cash flows use IRR.
Frequently Asked Questions
What is a good ROI?
It depends on risk and alternatives. Historically, broad stock markets have returned around 7% to 10% a year before inflation over long periods.
Why is annualized ROI important?
A 50% return over 10 years is far worse than 50% over one year. Annualizing puts investments on equal footing regardless of duration.
What is compound interest?
Compound interest is interest earned on both your original money and on previously earned interest. Over time it can make savings grow much faster than simple interest.
What is the difference between nominal and effective return?
The nominal return ignores compounding within the year, while the effective (annualised) return accounts for it. The effective figure is usually higher and better reflects real growth.
How does inflation affect my returns?
Inflation erodes purchasing power. The real return is the nominal return minus inflation, so an investment can grow in dollars yet still lose value in what it can buy.
What rate of return should I assume?
A common long-term assumption for a diversified stock portfolio is about 6% to 8% per year after inflation, but returns vary and are never guaranteed.
Does this account for taxes and fees?
Unless stated, the tool shows pre-tax, pre-fee growth. Subtract your fund expense ratio and expected tax rate to estimate what you keep.
Is this calculator free to use?
Yes. Every calculator on this site is completely free, with no hidden fees, no subscriptions and no limits on how many times you can use it.
How accurate are the results?
We use standard, widely accepted formulas and calculate in your browser using double-precision arithmetic. Results are rounded for readability, so treat them as reliable estimates rather than a guarantee. Real-world factors can vary the true figure.
Can I add this calculator to my own website?
Yes. Open this calculator page and use the "Add to your website" box in the sidebar to copy a ready-made iframe snippet, then paste it into any HTML page.