ROI Calculator: Calculate Return on Investment and Annualized ROI
This free ROI calculator shows how much you gained or lost on an investment, as a percentage and in money. Enter what you paid, what it is worth now, any income and costs along the way, and how long you held it. You get your ROI, your net gain, your investment multiple and the annualized return, all calculated in your browser.
Enter your investment details in the calculator above to see your ROI instantly.
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General information only, not financial advice. ROI ignores risk, tax and inflation unless you add them to the costs.
ROI and net gain
Percentage, money made and investment multiple.
Annualized return
Years, months or two dates, with the exact fraction of a year.
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Line up two investments, even with different time spans.
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ROI = (final value + income - total cost) / total cost x 100. Enter what you paid, what it is worth now, any income and costs, and the time held to see ROI, net gain and annualized return.
Key Takeaways
- ROI = (final value + income - total cost) / total cost x 100. A positive result is a gain and a negative one is a loss.
- ROI does not take time into account. A 50% ROI over 10 years is a very different result from 50% in one.
- Annualized ROI converts the total return into a yearly rate so you can compare investments held for different lengths of time.
- Include fees, repairs, tax and other costs in the cost figure, or the ROI will be too high.
- ROI ignores risk. Use it as one measure, not the only one.
How to Calculate ROI: Return on Investment Formula
Return on investment (ROI) compares what you gained with what you spent. The basic ROI formula is:
ROI (%) = (Gain from investment - Cost of investment) / Cost of investment x 100
The gain is the final value plus any income you received, such as dividends or rent. The cost is the initial investment plus any fees and other costs. A result of 25% means you earned 25 cents for every dollar you put in. For the formula variants and where ROI is used, see Wikipedia's return on investment article.
ROI Example: A Stock Purchase
Say you buy shares for $10,000 and pay $200 in brokerage fees. The shares are now worth $12,500, and you also received $300 in dividends.
| Step | Calculation |
|---|---|
| Total cost | $10,000 + $200 = $10,200 |
| Total gain | $12,500 + $300 = $12,800 |
| Net gain | $12,800 - $10,200 = $2,600 |
| ROI | $2,600 / $10,200 = 25.5% |
| Investment multiple | $12,800 / $10,200 = 1.25x |
If you held the shares for exactly one year, 25.5% is also the annual return. If you held them for three years, it is not, and you need the annualized figure below.
Annualized ROI Calculator: Compare Investments Held for Different Periods
ROI tells you the total return but not how long it took. Annualized ROI turns the total return into the equivalent yearly rate, so a three-year investment and a six-month one can be compared fairly. It is also known as compound annual growth rate (CAGR).
Annualized ROI = (Total value / Total cost) ^ (1 / years held) - 1
| Total ROI | Years held | Annualized ROI |
|---|---|---|
| 25% | 1 | 25.0% |
| 25% | 3 | 7.7% |
| 50% | 5 | 8.4% |
| 100% | 10 | 7.2% |
| -20% | 2 | -10.6% |
The same 25% total return is a strong result in one year and an ordinary one over three. For periods shorter than a year, enter months or two dates, and the calculator uses the exact fraction of a year.
Annualized ROI assumes steady growth. Real investments rise and fall, and the result tells you the average rate that would have produced the same end value.
Investment ROI Calculator: What to Include
The most common mistake is leaving out costs. A reliable ROI counts everything you paid and everything you received.
| Include in cost | Include in gain |
|---|---|
| Purchase price | Final or current value |
| Fees, commissions and spreads | Dividends and interest |
| Repairs, upgrades and maintenance | Rent received |
| Taxes and transaction costs | Any other cash you got back |
Inflation is not included. If you want to know your return in real terms, subtract the inflation rate over the same period from the annualized result.
Rate of Return Calculator: ROI vs Rate of Return
ROI and rate of return are close relatives. Rate of return is the money gained or lost as a share of the money invested, realized or not. ROI is usually the same calculation with the costs and income spelled out. If you are searching for a rate of return calculator, this tool gives you both the total figure and the annual one.
| Measure | What it tells you | Time included? |
|---|---|---|
| ROI | Total gain as a share of total cost | No |
| Annualized ROI (CAGR) | The steady yearly rate that gives the same result | Yes |
| Net gain | Money made or lost | No |
| Investment multiple | Final value as a multiple of cost (1.25x) | No |
For investments with many deposits and withdrawals, a single ROI figure is too crude. Use a money-weighted return or internal rate of return (IRR) calculation instead.
Marketing ROI Calculator: Measure Campaign Return
For a campaign, use profit and not revenue. Revenue ignores what the product cost to make, so it overstates the return. Count the ad spend and the cost of the goods or service in the cost figure. To work out what your ads cost per thousand views first, use the CPM calculator.
| Item | Amount |
|---|---|
| Revenue from the campaign | $7,000 |
| Cost of the goods sold | $3,000 |
| Campaign spend | $2,000 |
| Net gain | $7,000 - $3,000 - $2,000 = $2,000 |
| Marketing ROI | $2,000 / $2,000 = 100% |
A 100% marketing ROI means every dollar spent returned a dollar of profit on top of the dollar spent. This is an illustration, so use your own numbers. In the calculator, use the Marketing campaign example to see how the boxes are filled.
Rental Property ROI Calculator
For a rental, count the full cost of buying and preparing the property, and use the net rent, which is the rent left after running costs. A simple annual figure is net annual rent divided by total cost.
| Item | Amount |
|---|---|
| Purchase price | $200,000 |
| Closing and repair costs | $10,000 |
| Total cost | $210,000 |
| Annual rent | $18,000 |
| Annual running costs (tax, insurance, upkeep) | $6,000 |
| Net annual rent | $12,000 |
| Simple annual ROI | $12,000 / $210,000 = 5.7% |
This ignores any rise in the property's value and any mortgage. If you borrowed to buy, cash-on-cash return, which divides yearly cash flow by the cash you put in, is a better fit. To include a rise in value, put the expected sale price in the Final value box and use the annualized result.
What Is a Good ROI?
There is no single good ROI, because it depends on the risk, the time and what else you could have done with the money. A higher ROI usually comes with higher risk. Use these questions instead of a fixed target:
- Is the annualized ROI higher than a safe alternative such as a savings account?
- Does it beat inflation over the same period?
- How much could you lose if it goes wrong?
- How long is your money tied up?
Past ROI does not predict future returns, and this calculator does not give financial advice.
Why a Loss Needs a Bigger Gain to Recover
Percentages are not symmetric. If an investment falls 20%, you need a 25% gain, not 20%, to get back to where you started. A 50% fall needs a 100% gain.
| Loss | Gain needed to break even |
|---|---|
| -10% | 11.1% |
| -20% | 25.0% |
| -30% | 42.9% |
| -50% | 100.0% |
Limits of ROI
- It ignores time. A high ROI over a long time may be a poor yearly return. Use the annualized figure to compare.
- It ignores risk. Two investments can have the same ROI and very different chances of losing money.
- It depends on what you include. Different choices of cost and income give different answers, so use the same method when you compare.
- It is crude for irregular cash flows. Many deposits and withdrawals need an IRR calculation.
- It covers money only. It does not measure non-financial benefits.
How to Use the ROI Calculator
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1STEP 1 Enter the initial investment, which is the total you paid, in the first box.
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2STEP 2 Enter the final value, or the amount you sold it for.
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3STEP 3 Add any income received, such as dividends or rent, and any extra costs such as fees, repairs or tax.
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4STEP 4 Enter how long you held it, in years, months or between two dates.
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5STEP 5 Read your ROI, net gain, multiple and annualized return. Use Compare to line up two investments side by side.
Privacy: Your Numbers Stay in Your Browser
All calculations happen on your device. The figures you enter are not uploaded or stored, and they disappear when you close the tab.
FAQs
How do I calculate ROI?
Subtract your total cost from your total gain, divide the result by your total cost, and multiply by 100. Gain is the final value plus any income, and cost is the initial investment plus fees and other costs. For example, a $10,200 cost and a $12,800 gain give a net gain of $2,600 and an ROI of 25.5%.
What is the ROI formula?
ROI (%) = (gain from investment - cost of investment) / cost of investment x 100. A positive result means a profit, a negative one means a loss, and zero means you broke even. The formula needs a cost above zero, so it cannot be calculated for an investment that cost nothing.
What is annualized ROI?
Annualized ROI is the steady yearly rate that would produce the same total return over the time you held the investment. The formula is (total value / total cost) raised to the power of 1 divided by the years held, minus 1. A 25% total return over three years is about 7.7% a year.
What is a good ROI?
It depends on the risk, the time and your alternatives. A useful test is whether the annualized ROI beats a safe option and inflation over the same period. A higher ROI usually carries more risk. This calculator gives general information and is not financial advice.
Can ROI be negative?
Yes. If the final value plus income is lower than your total cost, the ROI is negative, which means a loss. For example, an investment of $10,000 that is now worth $8,000 has an ROI of -20%. To recover from it you would need a 25% gain on the lower amount.
Is ROI the same as annual return?
Only when you held the investment for exactly one year. ROI is the total return over the whole period, and annual return is the yearly rate. For a longer or shorter period, use the annualized ROI figure, which this calculator shows beside the basic result.
Does ROI include dividends, rent and fees?
It should. Add dividends, interest and rent to the gain, and add fees, repairs and taxes to the cost. Leaving out costs makes the ROI look better than it was. The calculator has separate boxes for extra income and extra costs so you can include them.
How do I calculate ROI for a rental property or a marketing campaign?
For a rental, divide net annual rent by the total cost of buying and preparing the property. For a campaign, use profit and not revenue: subtract the cost of goods and the campaign spend from revenue, then divide by the spend. Use the same cost-and-gain method as the basic calculator.
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