CL
Back to Calculators

ROI Calculator - Calculate Return on Investment Percentage

Free ROI calculator to measure investment performance. Calculate return on investment percentage, profit/loss, and annualized returns for any investment.

8 min read

iAbout This Calculator

Return on Investment (ROI) is one of the most important metrics for evaluating investment performance. Whether you're analyzing stocks, real estate, business ventures, or marketing campaigns, understanding your ROI helps you make informed decisions about where to allocate your resources. Our free ROI calculator instantly computes your investment return percentage, showing you exactly how much profit or loss you've made relative to your initial investment. For longer-term investments, you can also calculate the annualized ROI, which accounts for the time period and allows you to compare investments of different durations on an equal basis.

?How to Use

  1. 1

    Enter the initial investment amount - this is the total amount you invested or spent at the beginning.

  2. 2

    Enter the final value - this is the current or ending value of your investment, including any returns.

  3. 3

    Optionally, enter the investment period in years to calculate the annualized ROI for time-adjusted comparison.

  4. 4

    Click Calculate to see your ROI percentage, total profit/loss, and annualized return if applicable.

  5. 5

    Review the breakdown to understand each step of the calculation.

fFormula

ROI = \frac{(Final\ Value - Initial\ Investment)}{Initial\ Investment} \times 100

ROI is calculated by subtracting the initial investment from the final value, dividing by the initial investment, and multiplying by 100 to get a percentage. For annualized ROI, we use the compound annual growth rate (CAGR) formula.

ROI
Return on Investment as a percentage
Final Value
The ending value of the investment
Initial Investment
The original amount invested
Annualized ROI
((Final Value / Initial Investment) ^ (1/years) - 1) x 100

Examples

Stock Investment

Inputs: initialInvestment: 10000, finalValue: 15000, years: 3
+50% ROI, +14.47% annualized

An investment of $10,000 that grew to $15,000 over 3 years has a total ROI of 50% and an annualized return of 14.47% per year.

Real Estate Investment

Inputs: initialInvestment: 250000, finalValue: 350000, years: 5
+40% ROI, +6.96% annualized

A property purchased for $250,000 and sold for $350,000 after 5 years yields a 40% total return and 6.96% annualized ROI.

Marketing Campaign

Inputs: initialInvestment: 5000, finalValue: 25000
+400% ROI

A marketing campaign costing $5,000 that generated $25,000 in revenue has an impressive 400% ROI.

Loss Scenario

Inputs: initialInvestment: 20000, finalValue: 15000, years: 2
-25% ROI, -13.40% annualized

An investment of $20,000 that declined to $15,000 over 2 years shows a -25% loss with an annualized decline of 13.40% per year.

Use Cases

Stock Portfolio Analysis

Evaluate the performance of individual stocks or your entire portfolio to identify winners and underperformers.

Real Estate Investments

Calculate returns on rental properties or property flips, including appreciation and rental income relative to purchase price and costs.

Business Decisions

Analyze the return on business investments like equipment purchases, expansions, or new product launches.

Marketing ROI

Measure the effectiveness of marketing campaigns by comparing advertising spend to revenue generated.

Comparing Investments

Use annualized ROI to compare investments with different holding periods on an equal time-adjusted basis.

Frequently Asked Questions

What is a good ROI percentage?
A 'good' ROI depends on the investment type and risk level. For stocks, historical S&P 500 returns average around 10% annually. Real estate often targets 8-12%. Higher-risk investments should demand higher returns to compensate. Always compare ROI to relevant benchmarks and your personal financial goals.
How is ROI different from annualized return?
ROI shows the total percentage gain or loss on an investment regardless of time. Annualized return (CAGR) expresses this as a yearly rate, accounting for compounding. This allows fair comparison between investments held for different periods. A 50% ROI over 5 years equals about 8.45% annualized.
Should I include dividends in ROI calculation?
Yes, for total return ROI you should add all dividends or income received to the final value. This gives you the true total return. Many investors focus only on price appreciation and miss the significant contribution of dividends to total returns.
Can ROI be negative?
Yes, a negative ROI means you lost money on the investment. If your final value is less than your initial investment, the ROI will be negative. For example, investing $10,000 that drops to $8,000 gives you a -20% ROI.
How do I calculate ROI with multiple investments over time?
For multiple investments at different times (like dollar-cost averaging), use the Internal Rate of Return (IRR) instead of simple ROI. IRR accounts for the timing and size of each cash flow, giving you a more accurate picture of performance.

Conclusion

Understanding your ROI is essential for smart investing and business decisions. This calculator provides a quick way to measure investment performance, whether you're evaluating a single stock, real estate purchase, or marketing campaign. Remember that ROI is just one metric - consider risk, time horizon, and opportunity cost when making investment decisions. For investments held over multiple years, always look at annualized returns to properly compare different opportunities.