ROI Calculator
Calculate return on investment, net profit, and annualised ROI for any investment.
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How to use this calculator
Net Profit = Final Value − Initial Investment. ROI % = Net Profit ÷ Initial Investment × 100.
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Enter the initial amount you invested.
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Enter the final value of your investment.
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Enter how many years the investment ran.
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The calculator shows total ROI, net profit, and the annualised return (CAGR).
Frequently asked questions
What is a good ROI?
A "good" ROI depends on the asset class and time period. For stocks, 7–10% annualised is considered solid (historical S&P 500 average). For real estate, 8–12% is typical. For business investments, 15–30% is often expected.
What is the difference between ROI and CAGR?
ROI is the total percentage gain over the full period. CAGR (Compound Annual Growth Rate) is the equivalent annualised rate if growth had been perfectly steady each year. CAGR is better for comparing investments of different durations.
Can ROI be negative?
Yes. If the final value is less than the initial investment, ROI is negative — meaning a loss. For example, investing $10,000 and ending with $8,000 gives an ROI of -20%.
Does ROI account for inflation?
Standard ROI does not account for inflation. To find real ROI, subtract the inflation rate from your annualised ROI. A 7% return during 3% inflation gives a real return of approximately 4%.
What is return on investment (ROI)?
ROI formula explained
ROI = (Net Profit ÷ Cost of Investment) × 100. Net Profit = Final Value − Initial Cost. A $10,000 investment that grows to $13,500 has a net profit of $3,500 and an ROI of 35%. Simple, but it does not account for how long the money was invested.
Why annualised ROI matters
A 35% ROI over 5 years is far less impressive than 35% over 1 year. Annualised ROI (CAGR) lets you compare investments on equal footing. CAGR = (Final Value / Initial Value)^(1/Years) − 1. A 35% total return over 5 years equals a CAGR of about 6.2%.
ROI limitations
ROI ignores risk, timing of cash flows, taxes, and inflation. Two investments with the same ROI may have very different risk profiles. For serious investment analysis, use metrics like IRR (Internal Rate of Return), Sharpe ratio, and risk-adjusted returns alongside ROI.
Learn more from an authoritative source:
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →