ROI Calculator
Calculate Return on Investment (ROI) with our ROI Calculator. Enter your investment cost, final value or sale price, and any additional gains like dividends or rental income to see your percentage return. Perfect for evaluating stocks, real estate, business investments, marketing campaigns, or any investment decision. The calculator shows net profit, total return, and ROI percentage to help you compare different investment opportunities. All calculations happen instantly in your browser with no data storage.
How it works: Enter your investment cost, final value, and any additional gains to calculate your Return on Investment (ROI). ROI is calculated as: (Total Return - Investment Cost) / Investment Cost × 100.
What Is an ROI Calculator?
An ROI (Return on Investment) calculator measures the efficiency of an investment by expressing net profit as a percentage of the original cost. The formula is simple: ROI = (Net Profit ÷ Cost of Investment) × 100. A $10,000 investment that returns $13,500 has an ROI of 35%. What makes ROI powerful is that it's dimensionless — you can compare a stock investment to a rental property to a business acquisition using the same metric.
The limitation is that basic ROI ignores time. A 35% return over 2 years is very different from a 35% return over 10 years. That's why this calculator also computes annualized ROI — the equivalent annual compound rate that would produce the same total return over the same period.
How to Use This ROI Calculator
- Enter the initial investment — the total cost including fees, closing costs, or setup costs.
- Enter the final value — what the investment is worth or what you received when you sold.
- Optionally add any income received during the holding period (dividends, rent, etc.).
- Enter the holding period in years to get the annualized return.
- Read the ROI%, net profit, and annualized return to compare against benchmarks or other investments.
Worked Example: Rental Property ROI
David purchased a rental property for $300,000 (including closing costs and renovations). After 5 years, he sold it for $375,000. During that period he collected $60,000 in rental income and spent $20,000 on maintenance and taxes.
Net Profit = ($375,000 + $60,000) − $300,000 − $20,000 = $115,000
ROI = ($115,000 ÷ $300,000) × 100 = 38.3% | Annualized: 6.7%/year
A 6.7% annualized return is a solid result that beat most bond funds over the same period and approached broad stock market averages — while also providing tangible asset ownership.
Typical ROI by Asset Class
Historical average annual returns by asset class. Higher returns always come with higher risk and longer required time horizons.
| Investment Type | Typical Annual ROI | Risk Level | Time Horizon |
|---|---|---|---|
| High-Yield Savings / CDs | 3%–5% | Very Low | Any |
| Bonds (investment grade) | 3%–5% | Low | 3–10 years |
| S&P 500 Index Fund | 8%–10% (historical) | Moderate | 10+ years |
| Rental Real Estate | 6%–10% | Moderate | 5+ years |
| Small Business | 10%–20% | High | 5+ years |
| Cryptocurrency | Highly variable | Very High | Speculative |
ROI vs. Other Investment Metrics
ROI
Simple percentage gain. Best for comparing investments of similar size and duration.
Formula: (Gain − Cost) ÷ Cost × 100
Annualized Return (CAGR)
Converts total return to a per-year equivalent. Best for comparing investments held for different durations.
Formula: (End ÷ Start)^(1÷years) − 1
IRR (Internal Rate of Return)
Accounts for time value of money and varying cash flows. Best for multi-year projects.
More complex — use our IRR Calculator
Frequently Asked Questions
What is a good ROI?
It depends on the asset class and time horizon. For stocks, 8–10% annualized is the long-run S&P 500 average. For real estate, 6–10% total return (appreciation + income) is typical. For a business, 15–25%+ is common because of the higher operational risk. Always compare ROI against the risk and time commitment required.
What's the difference between ROI and annualized return?
Basic ROI is a total return percentage with no time component. Annualized return (CAGR) converts that into an equivalent yearly rate. A 50% total ROI over 5 years is an 8.4% annualized return — very different from a 50% ROI achieved in 1 year.
Does ROI account for inflation?
Basic ROI is a nominal figure — it doesn't adjust for inflation. To get real ROI, subtract the average annual inflation rate from your annualized return. At 3% inflation, an 8% annualized return produces a real return of approximately 5%.
Related Tools
Compound Interest Calculator
Model investment growth over time
Average Return Calculator
Calculate annualized investment returns
Future Value Calculator
Project the future value of investments
Rental Property Calculator
Analyze real estate investment returns
Percentage Difference
Compare values as percentages