ROI Calculator
Calculate return on investment as a clear annualized percentage
About this tool
This free ROI (Return on Investment) calculator computes the profitability of any investment or project. Enter the initial cost (what you put in) and the final value (what you got back), and it shows you the net profit, the total ROI as a percentage, and — if you enter the time period — the annualized rate of return.
The formula is simple: ROI = (Final Value − Initial Cost) ÷ Initial Cost × 100. If you invested $5,000 and received $6,500 back, your ROI is ($6,500 − $5,000) ÷ $5,000 × 100 = 30%. The annualized ROI uses the CAGR formula to account for how many years the investment ran, which allows fair comparison between investments of different durations. A 30% total ROI over 2 years is about 14.0% per year.
ROI is used to evaluate stocks, real estate, business projects, marketing campaigns, equipment purchases, and education. A positive ROI means you made money; a negative ROI means you lost money. What counts as a "good" ROI depends on the context — the S&P 500 historically averages about 10% annualized. Real estate often targets 8–12% annually. High-risk ventures may require 20%+ to justify the risk.
Keep in mind that this calculator measures simple financial ROI. It does not account for taxes, inflation, opportunity cost, or risk-adjusted returns. For a more complete picture of investment performance, also look at IRR (internal rate of return) and risk metrics like Sharpe ratio.