ROI Calculator
Calculate return on investment and annualized ROI percentage
Enter values above to calculate
How to Use
- Enter the initial amount invested.
- Enter the current or final value of the investment.
- Optionally enter the number of years for annualized ROI calculation.
- Click 'Calculate' to see ROI percentage and net profit.
- Negative ROI indicates a loss; positive ROI indicates a gain.
About ROI
ROI Formula
ROI (Return on Investment) = (Final Value − Initial Investment) / Initial Investment × 100%. A $10,000 investment that grows to $15,000 has an ROI of (15,000 − 10,000) / 10,000 × 100% = 50%. ROI measures profitability relative to the investment cost.
Annualized ROI
Simple ROI doesn't account for time. Annualized ROI = (1 + ROI)^(1/years) − 1. A 50% ROI over 5 years = (1.5)^(1/5) − 1 = 8.45% annualized. This allows fair comparison of investments with different time horizons. Stock market historical average is about 10% annualized, or 7% after inflation.
ROI Benchmarks
ROI varies widely by asset class: savings accounts (0.5–2%), bonds (3–5%), real estate (6–12%), stocks/index funds (7–10% long-term average), private equity (15–25%). Higher potential returns generally come with higher risk. Always compare ROI against relevant benchmarks.
Limitations of ROI
ROI has limitations: it ignores risk and volatility, doesn't account for taxes, and doesn't consider the time value of money as precisely as NPV or IRR. It also doesn't factor in opportunity cost. Use ROI alongside other metrics like Sharpe ratio, NPV, and IRR for comprehensive investment analysis.
Key Features
- Calculates total ROI percentage from initial and final values
- Annualized ROI calculation for comparing investments over different time periods
- Shows net profit or loss in dollar amount
- Works for any type of investment including stocks, real estate, or business