ROI Calculator
Return on investment (ROI) measures how much you gained relative to what you put in, expressed as a percentage. This ROI calculator computes the total return from your initial cost and final value, and — because a 50% return over one year is very different from 50% over ten — it also reports the annualized return (CAGR), the steady yearly rate that would produce the same result. ROI is a quick comparison tool: it does not account for risk, taxes, or money invested at different times, so use it alongside other measures for big decisions.
Calculate
Default result: 50.00
ROI Calculator · Materials
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Return on investment (%)
1000 × 1500 × 3
Shopping list
- Annualized return (% per year)
- 14.47
- Net gain
- $500.00
Est. total
50.00
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This calculator provides estimates for general informational purposes only and is not financial, investment, tax, or legal advice. Results are projections based on the figures you enter and the stated assumptions, and actual outcomes will differ. Consult a qualified financial professional before making borrowing, saving, or investment decisions.
Reviewed by the calculators.dev team · Last updated 2026-06-24
Formula reviewed against Standard ROI and CAGR definitions (return = gain ÷ cost; CAGR = (end ÷ start)^(1/n) − 1) — hand derivation (10-VERIFICATION.md)
How to calculate
Enter what you originally invested, what the investment is worth now, and how long you held it. The calculator subtracts cost from final value to get the net gain, divides that by the cost to get the total ROI percentage, then converts it to an annualized rate over your holding period. For $1,000 growing to $1,500 over 3 years, ROI is 50% and the annualized return is about 14.47% a year. A final value below the cost produces a negative ROI — a loss.
ROI = (final value − initial cost) ÷ initial cost, shown as a percentage. Annualized return (CAGR) = (final value ÷ initial cost)^(1 ÷ years) − 1, also shown as a percentage. Net gain = final value − initial cost. The annualized figure assumes the gain compounds smoothly over the holding period; it does not reflect the bumpy path real investments take.
Example calculation
Investing $1,000 and ending with $1,500 after 3 years is a net gain of $500, or a 50% total return on investment. Spread evenly across the three years, that works out to an annualized return (CAGR) of about 14.47% per year — the steady yearly rate that would turn $1,000 into $1,500.
- roiPercent
- 50.00%
- annualizedPercent
- 14.47%
- netGain
- $500.00
Assumptions
- ROI is a simple ratio of gain to cost; it ignores the timing of cash flows, risk, taxes, and fees.
- The annualized return assumes smooth compounding over the holding period, which real returns rarely follow year to year.
- A single initial cost and final value are compared; partial buys, sells, or dividends are not modelled.
Common mistakes
- Comparing investments by total ROI without considering the time held — annualized return makes a fair comparison.
- Forgetting fees and taxes, which lower the real return below the headline ROI.
- Ignoring risk. A higher ROI often comes with higher risk; the percentage alone does not tell the whole story.
Frequently asked questions
What is a good ROI?
It depends on the investment, the risk, and the time held. Compare the annualized return to relevant benchmarks — for example, a broad stock-market index's long-term average — rather than judging the total ROI in isolation.
What is the difference between ROI and annualized return?
ROI is the total percentage gain over the whole holding period. Annualized return (CAGR) is the equivalent steady yearly rate, which lets you compare investments held for different lengths of time.
Can ROI be negative?
Yes. If the final value is less than what you invested, the ROI is negative, representing a loss. The calculator handles losses and shows the negative percentage.
Does this account for taxes and fees?
No. It uses the raw initial cost and final value. To find your real return, enter the after-fee, after-tax amounts, or treat the result as a pre-tax estimate.