ROI Calculator
Calculate the return on an investment using its initial cost, final value and additional expenses. Enter your figures in the white box. The purple box updates automatically to show your estimated profit, ROI and annualized return.
What to calculate next?
Suggested next step Investment Return Calculator →Review the performance of an investment.
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How the ROI Calculator works
Return on investment (ROI) measures the profit or loss generated by an investment relative to its cost. It is commonly used to evaluate investments, business projects and financial decisions.
ROI formula
ROI = (Net profit ÷ Total investment cost) × 100.
Net profit = Final investment value − Total investment cost.
Total investment cost = Initial investment + Additional costs.
ROI example
Suppose you invest $10,000 and incur an additional $500 in costs. Your total investment cost is $10,500.
If the investment is later worth $15,000, your net profit is $4,500.
Your ROI is approximately 42.9%.
What is annualized ROI?
Annualized return expresses the investment's total return as an equivalent compounded yearly growth rate. This makes it easier to compare investments held over different periods.
Annualized return = ((Final value ÷ Total investment cost) raised to the power of (1 ÷ Years) − 1) × 100.
This is a simplified annualized return calculation. It assumes the total investment cost is committed at the beginning and the final value is received at the end of the investment period.
It does not account for interim cash flows, additional contributions made later, dividends or distributions unless included in the final value. For investments with cash flows at different dates, an internal rate of return (IRR) calculation may be more appropriate.
Results are estimates and do not guarantee future investment performance.
Why does investment holding period matter for ROI?
A 20% total return over one year and a 20% total return over five years have the same simple ROI but very different annualized returns. Annualized ROI converts a total gain or loss into an equivalent compounded yearly rate, making different holding periods easier to compare. It does not capture the timing of additional cash flows.