ROI Calculator
Calculate the Return on Investment for any venture. Enter your initial investment and the final value to see your ROI percentage, net profit, and annualized return.
Return on Investment
Net Profit
Annualized ROI
This calculator provides estimates and is for informational purposes only.
Understanding ROI
ROI measures the profitability of an investment relative to its cost. The formula is: ROI = (Gain – Cost) / Cost × 100%. A positive ROI means profit; negative means loss.
Annualized ROI adjusts for the time period of the investment, making it easier to compare investments of different durations. It uses the formula: (Final/Initial)^(1/years) – 1.
Frequently Asked Questions
What is a good ROI?
It depends on the context. The stock market averages about 7-10% annually. Real estate typically returns 8-12%. A "good" ROI should exceed inflation and the risk-free rate available from government bonds.
Does ROI account for risk?
No. ROI is a simple return measure and doesn't factor in risk, time value of money, or opportunity cost. Higher-risk investments should ideally provide higher returns to compensate.
What's the difference between ROI and annualized ROI?
ROI is the total return over the entire period. Annualized ROI converts it to a yearly equivalent, making it easier to compare a 6-month investment with a 5-year one.