ROI Calculator
Enter what you invested and what it is worth now to get the ROI, the profit and, with a holding period, the annualized ROI.
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Years. Adds the annualized ROI.
- Amount invested
- $10,000.00
- Final value
- $12,500.00
- Net profit
- $2,500.00
- Growth multiple
- 1.25×
- Annualized ROI
- 7.72%
| Annual return | 5 years | 10 years | 20 years |
|---|---|---|---|
| 3% | 15.9% | 34.4% | 80.6% |
| 5% | 27.6% | 62.9% | 165.3% |
| 7% | 40.3% | 96.7% | 287% |
| 10% | 61.1% | 159.4% | 572.7% |
| 12% | 76.2% | 210.6% | 864.6% |
How this was calculated
- Profit = final value − amount invested = 12,500.00 − 10,000.00 = 2,500.00.
- ROI = profit ÷ amount invested = 2,500.00 ÷ 10,000.00 = 25.00%.
- Annualized ROI = (12,500.00 ÷ 10,000.00)^(1 ÷ 3) − 1 = 7.72% per year.
Past returns do not predict future results. Educational estimate, not financial advice.
How to calculate ROI
Return on investment (ROI) shows how much you gained or lost compared with what you put in: ROI = (final value − amount invested) ÷ amount invested × 100. If you invest $10,000 and it grows to $12,500, the profit is $2,500 and the ROI is 2,500 ÷ 10,000 = 25%. This ROI calculator also gives the growth multiple (1.25×) and, when you enter a holding period, the annualized ROI.
ROI vs annualized ROI
A 25% ROI earned in one year is excellent, but earned over ten years it is mediocre. Annualized ROI fixes that by spreading the gain as a compound yearly rate: (final ÷ invested)^(1 ÷ years) − 1. The same $10,000 turning into $12,500 over three years is 1.25^(1/3) − 1 = 7.72% per year. Use the annualized figure whenever you compare investments held for different lengths of time. The compound interest calculator runs the same math forward.
What to count as cost and as return
Put everything you paid into the amount invested: purchase price, commissions, closing costs, repairs, advertising spend. Put everything you received into the final value: sale proceeds plus dividends, rent or interest collected along the way. Leaving out fees is the most common reason a quoted ROI looks better than the bank balance. Taxes and inflation are separate: an ROI of 5% in a year with 3% inflation is a gain of roughly 2% in purchasing power, and the Bureau of Labor Statistics publishes the CPI used to measure that.
When ROI misleads
ROI ignores risk and timing. Two investments with a 20% ROI are not equal if one took six months and the other six years, or if one could have lost everything. It also says nothing about cash flow in between, so for projects with several payments an internal rate of return is more accurate. A loss is harder to recover than it looks: after a −50% ROI you need +100% just to get back to even. For a dividend-paying holding, add the payouts to the final value, or use the dividend calculator to estimate them.
Worked example: a rental property
You buy a rental for $200,000, spend $15,000 on repairs and closing costs, and later sell for $260,000 after collecting $30,000 in net rent. Invested = $215,000, final value = $290,000, profit = $75,000, ROI = 34.88%. Held for five years, the annualized ROI is 6.17% a year. Switch to “Find the value for a target ROI” to see what final value a 50% ROI would require.
Frequently asked questions
How do you calculate ROI?
ROI = (final value − amount invested) ÷ amount invested × 100. Investing $10,000 and ending with $12,500 gives $2,500 ÷ $10,000 = 25%.
What is a good ROI?
It depends on the time and risk. As a yardstick, broad US stock indexes have returned roughly 7–10% a year on average over long periods, with large swings, while savings accounts and Treasuries pay less with far less risk.
What is annualized ROI?
Annualized ROI is the yearly compound rate that produces your total return: (final ÷ invested)^(1 ÷ years) − 1. A 25% ROI over 3 years is 7.72% per year.
Can ROI be negative?
Yes. If $2,000 shrinks to $1,500, ROI = −$500 ÷ $2,000 = −25%. A total loss is −100%.
What should I include in the amount invested?
Every cost of making the investment: price paid, fees, commissions, closing costs and repairs. Add dividends, rent or interest received to the final value.