ROI Calculator
Calculate your return on investment — enter the amount invested and the amount returned (and an optional holding period) to see your ROI percentage, net profit and annualized return.
How return on investment works
ROI measures how much you made relative to what you put in: net profit divided by cost, as a percentage. Turning $10,000 into $13,000 is a 30% ROI. It is a quick, universal way to compare very different investments — a marketing campaign, a rental property, a course — on the same scale.
Why annualized ROI matters
Plain ROI ignores time, so a 30% return looks identical whether it took one year or ten. Enter a holding period above and the calculator also shows the annualized ROI — the average yearly rate — which is the fair way to compare returns earned over different spans. To project compounding growth over time, use the dividend calculator or rate of change calculator.
The ROI formula
ROI compares the net gain on an investment to its cost. The formula has just two inputs, which is exactly why it is so widely used:
ROI = (Amount returned − Amount invested) ÷ Amount invested × 100
- Amount invested — everything you put in: the purchase price plus fees, commissions and any extra costs.
- Amount returned — everything you got back: the sale value or current value, plus any income (dividends, rent, interest) collected along the way.
- Net profit — the difference between the two. A positive number is a gain; a negative number is a loss.
The result is a percentage. ROI of 0% means you broke even, a positive ROI means you made money, and a negative ROI means you lost money. To express a decimal result as a percentage, multiply by 100 — 0.30 becomes 30%.
Worked example, step by step
Suppose you invest $10,000 and later sell for $13,000:
- Step 1 — net profit: $13,000 − $10,000 = $3,000.
- Step 2 — divide by cost: $3,000 ÷ $10,000 = 0.30.
- Step 3 — convert to a percentage: 0.30 × 100 = 30% ROI.
- Step 4 — annualize (if it took 3 years): (13,000 ÷ 10,000) raised to the power of 1÷3, minus 1, equals about 9.1% per year.
So the same investment is “+30% ROI” in total but only about “9.1% per year” once you account for the three-year holding period. The calculator above does all four steps the moment you type your numbers.
What different returns look like
A handful of representative figures, all based on a $10,000 investment, to show how net profit, total ROI and annualized ROI relate:
| Invested | Returned | Net profit | Total ROI | Years | Annualized ROI |
|---|---|---|---|---|---|
| $10,000 | $11,000 | $1,000 | +10% | 1 | +10.0% / yr |
| $10,000 | $13,000 | $3,000 | +30% | 3 | +9.1% / yr |
| $10,000 | $13,000 | $3,000 | +30% | 10 | +2.7% / yr |
| $10,000 | $20,000 | $10,000 | +100% | 7 | +10.4% / yr |
| $10,000 | $8,500 | −$1,500 | −15% | 2 | −7.8% / yr |
Notice rows two and three: a 30% total return is excellent when earned in one to three years, but stretched over ten years it works out to under 3% a year — less than a savings account. That is the whole reason the annualized figure exists.
ROI compared with other return metrics
ROI is the simplest member of a family of return measures. Knowing when to reach for each one keeps you from over- or under-stating performance:
| Metric | What it measures | Accounts for time? | Best for |
|---|---|---|---|
| ROI | Total gain vs total cost | No | Quick, like-for-like comparisons |
| Annualized ROI | Total ROI expressed per year | Yes | Investments held for different lengths of time |
| CAGR | Smoothed compound growth rate per year | Yes | A single lump sum growing over several years |
| IRR | The rate that makes all cash flows net to zero | Yes | Projects with deposits and withdrawals at different times |
| ROAS | Revenue earned per dollar of ad spend | No | Advertising and marketing campaigns |
For a single lump sum, annualized ROI and CAGR give the same answer. The moment money moves in and out at different dates, IRR is the more honest measure. To model steady compounding with regular contributions, the compound interest calculator is the right tool.
Using ROI by situation
Investing in stocks and funds
Include both price change and any dividends in the amount returned. If you bought $5,000 of a fund, collected $200 in dividends and the holding is now worth $5,600, the amount returned is $5,800, for a net profit of $800 and a 16% ROI. Reinvested dividends compound — estimate that with the dividend calculator.
Marketing and advertising
For a campaign, the “investment” is total spend and the “return” is the profit the campaign produced. Spend $250,000 and earn $400,000 in attributable gross profit, and ROI is ($400,000 − $250,000) ÷ $250,000 = 60%. Marketers often also track ROAS (revenue ÷ ad spend), which counts revenue rather than profit and is therefore always a higher-looking number.
Real estate
Property ROI should capture both rental cash flow and appreciation, against the full cash you tied up (down payment, closing costs, improvements). Buy at $600,000, collect net rent along the way, and sell at $900,000, and the gain on the purchase price alone is ($900,000 − $600,000) ÷ $600,000 = 50%. If you used a mortgage, your ROI on the cash you actually invested can be much higher because of leverage — though leverage raises risk too.
Business projects
For a piece of equipment or a software rollout, compare the total cost against the savings or extra profit it generates. Many firms only green-light a project when its expected ROI clears their cost of capital — the return they could earn on the money elsewhere.
What counts as a good ROI?
There is no universal cutoff — a “good” ROI is one that beats what you could earn elsewhere for the same level of risk. A common yardstick for long-term investing is the US stock market: the S&P 500 has historically returned roughly 10% per year on average (about 10.3% annually since 1957, with dividends reinvested, before inflation), according to Fidelity’s analysis of the index. Beating that consistently is hard, so an annualized ROI in that range over many years is solid. Always compare the annualized figure, not the raw total, when investments were held for different lengths of time.
Limitations of ROI
ROI’s simplicity is also its weakness. Keep these caveats in mind:
- It ignores time. Basic ROI treats a one-year and a ten-year return as identical. Always pair it with the annualized figure.
- It ignores the time value of money. A dollar returned today is worth more than a dollar returned in five years; ROI does not discount future cash.
- It ignores risk. Two investments can show the same ROI while one is far more likely to lose money.
- It can be gamed. Because investors define “cost” and “return” differently — some include fees and taxes, some do not — two ROI figures may not be comparable. Be consistent about what you count.
How to use this ROI calculator
- Amount invested: enter your total cost, including fees and commissions.
- Amount returned: enter the sale or current value plus any income collected.
- Holding period (optional): add the number of years to also get the annualized ROI.
The result updates instantly, showing your ROI percentage, net profit and — when you provide a holding period — the annualized return. For related math, try the markup calculator, percentage calculator or 401(k) calculator.
For general information and educational use only; this is not financial, investment or tax advice, and past performance does not guarantee future results. Investment returns are not guaranteed and you can lose money. For authoritative guidance, see the U.S. Securities and Exchange Commission’s investor resources at Investor.gov and the Consumer Financial Protection Bureau (CFPB). Consult a qualified financial professional before making investment decisions.
Frequently asked questions
What does a negative ROI mean?
A negative ROI means the investment lost money: the amount returned was less than the amount invested. For example, putting in $10,000 and getting back $8,500 is a net loss of $1,500, which is (8,500 − 10,000) ÷ 10,000 × 100 = −15% ROI. Any ROI below 0% is a loss; 0% is breaking even.
What is the difference between ROI and CAGR?
ROI is the total return over the whole period and ignores time, while CAGR (compound annual growth rate) is the smoothed yearly growth rate of a lump sum. For a single investment with no deposits or withdrawals, CAGR equals the annualized ROI this calculator shows. CAGR and annualized ROI are the time-aware versions of plain ROI.
What is ROAS and how is it different from ROI?
ROAS (return on ad spend) divides the revenue a campaign produced by the money spent on ads, while ROI divides the profit by the total cost. Because ROAS uses revenue instead of profit, it always looks higher than ROI. Marketers use ROAS for quick campaign checks and ROI when they want the true bottom-line return.
How do I calculate ROI on real estate?
Add up everything you put in — down payment, closing costs and improvements — and everything you got out, including rental income and the sale price. Subtract cost from return, divide by cost, and multiply by 100. Buying at $600,000 and selling at $900,000 is (900,000 − 600,000) ÷ 600,000 × 100 = 50% on the purchase price; using a mortgage can raise the ROI on the cash you actually invested.
How do I calculate ROI in Excel or Google Sheets?
Put the amount invested in one cell and the amount returned in another, then use a formula like =(B1-A1)/A1, and format the cell as a percentage. For annualized ROI over several years, use =(B1/A1)^(1/years)-1. Or just enter your figures in the calculator above to skip the spreadsheet entirely.
How do I calculate ROI?
ROI is the net profit divided by the cost, as a percentage: ROI = (amount returned − amount invested) ÷ amount invested × 100. For example, turning $10,000 into $13,000 is ($13,000 − $10,000) ÷ $10,000 × 100 = 30%. Enter your figures above for an instant result.
What is a good ROI?
It depends on the investment and the risk. As a benchmark, the stock market has historically averaged roughly 7–10% a year. A “good” ROI beats what you could earn elsewhere for similar risk — and looking at the annualized figure makes returns over different time spans comparable.
What is annualized ROI?
Annualized ROI converts a total return into an average yearly rate, so you can compare investments held for different lengths of time. A 30% total return over three years is about 9.1% per year. Enter a holding period above to see the annualized figure.
Does ROI account for time?
Basic ROI does not — it just compares money in to money out. That is why a holding period matters: a 30% return is excellent in one year but mediocre over ten. Use the annualized ROI for a time-aware comparison.