ROI Calculator
Return on investment (ROI) measures how much you gained or lost relative to what you put in, expressed as a percentage. This calculator goes beyond a single number: it folds in fees and income, annualizes the return over your holding period so you can compare investments fairly, and can even reverse-solve the exit value you need to hit a target ROI.
Formula
Worked example
Invest $1,000, end with $1,500 after 1 year: ROI = (500 / 1000) × 100 = 50% (a $500 profit). Held over 4 years instead, the annualized ROI is (1.5)^(1/4) - 1 = about 10.7% per year.
How the Calculator Works
In its standard mode the calculator takes the amount you invested and the final value you ended with, then reports both your net profit and your total ROI as a percentage. You can optionally add buying and selling fees, which are subtracted from your effective return, and any income the asset paid out along the way (dividends, interest or rent), which is added in. This gives a true total return rather than just the change in price. Every figure recalculates instantly, and you can display the currency amounts in any of the supported denominations.
Annualizing the return over time
A 50% gain earned in one year is far stronger than the same 50% earned over ten years, yet a plain ROI figure treats them identically. Enter how long you held the investment and the calculator computes the annualized ROI, which is the equivalent steady yearly rate, using the compound formula annualized = (1 + ROI)^(1/years) minus 1. This is the figure to use when you are comparing opportunities of different lengths, because it puts everything on a per-year footing and lines up directly with quoted interest rates and CAGR.
Reverse-solving a target ROI
Switch to target mode when you already know the return you want and need to know what exit value gets you there. Enter your amount invested and a target ROI percentage, and the calculator works backward to the final value required, including any fees and income you have specified. This is useful for setting a sell price, sizing a project so it clears a hurdle rate, or sanity-checking whether a promised return is realistic for the price being asked.
What ROI does and does not capture
ROI is driven by the difference between what you got back and what you put in, adjusted here for fees and income. It does not adjust for inflation, so the result is a nominal rather than a real return, and even the annualized figure assumes a single lump sum held over one continuous period rather than a series of deposits. For irregular cash flows the internal rate of return (IRR) or net present value (NPV) are more precise. This tool is for general information only and is not investment advice; consult a qualified professional before making decisions.
Total ROI vs annualized ROI
| Total ROI | Over 1 year | Over 3 years | Over 5 years | Over 10 years |
|---|---|---|---|---|
| 10% | 10.0%/yr | 3.2%/yr | 1.9%/yr | 1.0%/yr |
| 25% | 25.0%/yr | 7.7%/yr | 4.6%/yr | 2.3%/yr |
| 50% | 50.0%/yr | 14.5%/yr | 8.4%/yr | 4.1%/yr |
| 100% | 100.0%/yr | 26.0%/yr | 14.9%/yr | 7.2%/yr |
The same total return looks very different once you spread it over the holding period.
Frequently asked questions
What is a good ROI?
There is no universal benchmark, as a "good" ROI depends on the asset class, risk level, and time horizon involved. The S&P 500 has historically averaged roughly 10% per year in nominal terms, which is often used as a rough baseline for equity investments. Because of that yearly framing, the annualized ROI from this calculator is the fairer number to compare against such benchmarks, rather than the raw total ROI.
What is the difference between ROI and annualized ROI?
Total ROI is the whole gain over the entire holding period as a percentage of what you invested, with no reference to time. Annualized ROI converts that into the equivalent compound yearly rate using annualized = (1 + ROI)^(1/years) minus 1. A 60% total ROI over 4 years annualizes to about 12.5% per year, which is the figure you should use to compare against other yearly returns.
Should I include dividends and fees in ROI?
Yes, for an accurate total return. Trading commissions, platform fees and taxes paid reduce what you actually keep, so subtract them. Income the asset generates, such as dividends, bond interest or rental receipts, should be added because it is part of your return even if the price did not move. This calculator has optional fields for both so the ROI reflects your real net outcome.
Does ROI account for the time value of money?
The simple total ROI does not; it treats a gain achieved in one month the same as the same gain over twenty years. The annualized ROI option partly addresses this by expressing the return as a compound yearly rate. For a full time-value treatment of uneven cash flows, calculate the internal rate of return (IRR) or net present value (NPV) instead.
Can ROI be negative?
Yes. If your effective final value (after fees, plus income) is lower than what you invested, the ROI is negative, which represents a loss. For example, if an asset falls in price or a project generates less than it cost, the ROI drops below zero. A negative ROI does not automatically mean the decision was wrong, as non-financial factors sometimes justify the expenditure.