ROI Calculator

Calculate return on investment, net profit, and annualized ROI instantly

Investment returns | CAGR & ROI

Enter the final value of your investment (or initial + net profit)

Quick Examples

Results

Net Profit / Loss
Simple ROI
Investment Multiple
CAGR

Formula Used

ROI = (Final − Initial) / Initial × 100

CAGR = (Final/Initial)^(1/years) − 1

What Is ROI and Why Does It Matter?

The universal metric for measuring investment profitability, used by investors, businesses, and analysts worldwide

Return on Investment (ROI) is one of the most widely used financial metrics in the world. It measures the gain or loss generated relative to the amount of money invested, expressed as a percentage. Whether you're evaluating stocks, real estate, a business venture, or a marketing campaign, ROI gives you a clear, comparable signal of profitability.

The beauty of ROI is its simplicity: a positive ROI means you earned more than you put in; a negative ROI means you lost money. By expressing returns as a percentage rather than an absolute dollar figure, ROI lets you compare investments of vastly different sizes — a 25% ROI on a $1,000 investment is equivalent in relative terms to a 25% ROI on $1,000,000.

Investment Decisions

ROI helps you compare different investment opportunities and allocate capital to where it generates the most return, whether in stocks, property, or business.

Performance Tracking

Track how well your portfolio or individual investments are performing over time. Regular ROI calculation helps you identify winners and cut underperformers.

Fair Comparison

Compare investments of different sizes and durations on a level playing field. A percentage-based metric removes the distortion of absolute dollar amounts.

How to Calculate ROI

Step-by-step guide to calculating simple ROI, annualized ROI, and CAGR

1

Simple ROI Formula

The basic ROI formula is: ROI = (Net Profit / Cost of Investment) × 100. Net Profit is simply Final Value minus Initial Investment. For example: invest $10,000, get back $15,000 → Net Profit = $5,000 → ROI = 50%.

ROI (%) = (Final Value − Initial Investment) / Initial Investment × 100
2

Annualized ROI & CAGR

Simple ROI doesn't account for how long an investment was held. CAGR (Compound Annual Growth Rate) expresses the annualized growth rate, making it ideal for comparing investments held over different time spans.

CAGR = (Final Value / Initial Investment)^(1 / Years) − 1
3

Investment Multiple

The investment multiple (also called the Money-on-Money multiple) tells you how many times you grew your original investment. A 2.5x multiple means you turned every $1 into $2.50.

Multiple = Final Value / Initial Investment
4

Beating Inflation

An ROI that exceeds the inflation rate (~3% annually) means your investment is growing in real terms — your purchasing power is increasing. If your annualized ROI is below 3%, you're technically losing ground even if the nominal number is positive.

ROI Benchmarks by Asset Class

Historical average returns for common investment types — use these as reference points

S&P 500 / Stock Market

The S&P 500 has historically returned approximately 10% per year (nominal) or ~7% after inflation. It's the most widely used benchmark for long-term equity investing.

Real Estate

Residential real estate in the US has averaged 7–10% annually including rental income. However, returns vary widely by location, leverage, and market conditions.

Savings Account / CDs

High-yield savings accounts currently offer 4–5% APY, while traditional savings accounts often return less than 1%. These are low-risk, highly liquid options.

Cryptocurrency

Crypto returns vary enormously — Bitcoin has produced extraordinary gains but also severe drawdowns. High potential ROI comes with correspondingly high volatility and risk.

Private Business

Small business investments can yield 15–30%+ ROI annually but carry significant operational risk. Success depends heavily on management, market conditions, and execution.

Government Bonds

US Treasury bonds currently yield 4–5% for longer durations. Considered among the safest investments, they serve as a benchmark for the risk-free rate of return.

Frequently Asked Questions

Common questions about ROI, CAGR, and investment return calculations

ROI (Return on Investment) measures the profitability of an investment as a percentage. It's calculated as (Net Profit / Cost of Investment) × 100. A positive ROI means you made money; negative means a loss. For example, investing $10,000 and getting back $13,000 gives you a 30% ROI.
A "good" ROI depends on the investment type and risk. The S&P 500 historically returns ~10% annually. Real estate averages 7–10%. Savings accounts currently yield ~4–5%. Anything above inflation (~3%) is technically a real gain, but most investors target returns that meaningfully exceed the risk-free rate.
CAGR (Compound Annual Growth Rate) is the annualized rate at which an investment grows from its starting value to its ending value, assuming profits are reinvested each period. The formula is: (End Value / Start Value)^(1/years) − 1. CAGR smooths out volatility to show the steady growth rate that would produce the same result.
Simple ROI ignores time entirely — a 100% ROI over 1 year and a 100% ROI over 10 years look identical, even though one is dramatically better. Annualized ROI (CAGR) accounts for the holding period, letting you fairly compare investments of different durations. For a 1-year investment, simple ROI equals annualized ROI.
Yes. A negative ROI means the investment lost money. For example, if you invested $1,000 and ended with $700, your net profit is −$300 and your ROI is −30%. Negative ROI is common in high-risk investments like individual stocks or early-stage businesses, and it's important to factor this possibility into any investment decision.