How to use this calculator
- Enter the Amount invested, including purchase costs and fees you paid.
- Enter the Amount returned, the final value or sale proceeds plus any income received.
- Set the Holding period in years (use decimals for months).
- Read Return on investment, Gain or loss, Annualized return and Multiple of money.
How ROI is calculated
ROI is the profit divided by the cost, shown as a percentage. It answers a simple question: for each dollar I put in, how many cents came back as profit?
ROI = (Returned − Invested) ÷ Invested × 100 Annualized = (Returned ÷ Invested)^(1/t) − 1- Invested = everything you paid in, including fees
- Returned = final value or proceeds, plus income you received along the way
- t = holding period in years
Because plain ROI ignores time, this calculator also shows an annualized figure, which converts the total return into the steady yearly growth rate that would produce it.
Example: the same 24% over two years and six years
You invest $25,000 and get back $31,000. The gain is $6,000, the ROI is 24% and you got back 1.24 times your money. That sounds good, but the time it took changes the story.
If it took 2 years, the annualized return is 11.36% a year. If it took 6 years, the same 24% is only 3.65% a year. The ROI figure is identical, yet the first outcome is much stronger. Always look at ROI and the holding period together.
Reading a negative result
ROI works for losses too. Put in $12,000 and get back $9,000 after two years and the calculator shows an ROI of −25%, a loss of $3,000 and a multiple of 0.75. The annualized figure is −13.4% a year.
Note the asymmetry: a 25% loss needs a gain of 33% on what is left just to break even. That is one reason large drops are so hard to recover from.
Getting ROI right
The most common mistake is leaving costs out. Include brokerage and transaction fees, repairs on a property, ad spend on a campaign, and add any dividends or rent received to the amount returned. A result that ignores costs flatters the investment.
To compare unlike investments, use the annualized return, and make sure the periods are comparable. For growth between two values without income, the CAGR calculator is the dedicated tool, and the stock profit calculator handles share trades with fees.
What ROI does not tell you
ROI says nothing about risk. Two investments can show 10% a year, but one may have swung wildly while the other barely moved. It also ignores inflation and taxes, so your real after-tax return will be lower. See the inflation calculator to adjust.
The annualized rate assumes one lump sum in and one out. If you added money over time, the figure is only approximate. Past returns do not predict future ones, and this page is not investment advice.
Frequently asked questions
What is a good ROI?
It depends on the risk and the time. Compare the annualized return with alternatives such as a savings account, a bond or a broad market index over a similar period.
What is the difference between ROI and annualized ROI?
ROI is the total gain over the whole period. Annualized ROI spreads it into a yearly compound rate so investments held for different lengths of time can be compared.
Should I include fees and taxes?
Include fees in the amount invested or deducted from the amount returned. Taxes depend on your situation, so add them separately if you want an after-tax figure.
Can ROI be more than 100%?
Yes. An ROI of 100% means you doubled your money, and the multiple of money would read 2.0x.
Why is the annualized return blank?
It needs a holding period above zero and a positive amount returned. If you lost everything, the yearly rate is not defined.