Return on Investment (ROI) Calculator
Calculate ROI as a percentage plus the annualized return over your holding period — so a two-year and a five-year gain are actually comparable.
How it works
ROI % = (final value − initial) ÷ initial × 100 · Annualized return = (final ÷ initial)^(1 ÷ years) − 1
Total ROI is the net gain as a percentage of what you put in — simple, but it says nothing about how long the money was tied up. A 50% ROI over two years is far better than the same 50% over ten. The annualized return (CAGR) fixes this by spreading the total return evenly across the holding period, giving a per-year rate you can compare across investments of different lengths.
Worked example
A $10,000 investment worth $15,000 after 3 years has a total ROI of (15,000 − 10,000) ÷ 10,000 = 50%. Annualized, that is (15,000 ÷ 10,000)^(1÷3) − 1 ≈ 14.5% per year.
Frequently asked questions
What is the difference between ROI and annualized return?
ROI is the total percentage gain regardless of time. Annualized return (CAGR) converts it to an equivalent per-year rate, so investments held for different lengths of time can be compared fairly. A 50% total ROI is 14.5%/year over 3 years but only 4.1%/year over 10.
Does this ROI account for cash flows during the period?
No — it compares a single starting value to a single ending value. For investments with interim contributions or withdrawals, an IRR or XIRR calculation captures the timing of each cash flow more accurately.
Can ROI be negative?
Yes. If the final value is below the initial investment, the gain is negative and so is the ROI, indicating a loss. A −20% ROI means you ended with 80% of what you started with.
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Educational estimate, not financial advice.