ROI Calculator

ROI Calculator

Measure the gain, return percentage and annualized result of an investment.

UNDERSTAND THE ANSWER

How is this calculated?

Simple ROI shows total return. Annualized ROI converts that return into an equivalent compound annual growth rate.

Return on investment formulaROI = (Final value − Investment) ÷ Investment × 100

A practical example

An investment that grows from $10,000 to $13,500 earns $3,500, or a 35% total ROI.

Assumptions, interpretation and common mistakes

Calculation assumptions

  • Initial and final values use the same valuation method.
  • The holding period is measured in years.
  • Cash flows during the holding period, taxes, fees and risk are excluded.

How to interpret the result

  • Total ROI measures gain or loss relative to the initial investment.
  • Annualized return converts the total change into a compound yearly rate.
  • A high ROI does not show volatility, liquidity or the chance of loss.

Common mistakes to avoid

  • Comparing total ROI across investments held for different lengths of time.
  • Ignoring additional cash invested or withdrawn during the period.
  • Comparing a pre-tax result with an after-tax alternative.