ROI Calculator
Calculate your return on investment, annualized return, and absolute gain or loss from any investment.
ROI Calculator
Calculate your return on investment, annualized return, and total gain or loss.
Return on Investment (ROI) is one of the most widely used metrics in finance. It measures how much profit or loss an investment generates relative to its cost.
How It Works
The basic ROI formula is: ROI = ((Final Value - Initial Investment) / Initial Investment) x 100.
For investments held over multiple years, the annualized return gives a more meaningful comparison. This uses the formula: Annualized Return = (Final Value / Initial Investment)^(1/years) - 1.
Why Annualized Returns Matter
A 100% total return sounds impressive, but it matters whether that took 2 years or 20. Annualized returns let you compare investments with different time horizons on a level playing field.
When to Use This Calculator
- Evaluating the performance of stocks, property, or other investments
- Comparing different investment opportunities
- Calculating the real return after accounting for the time value of money
- Assessing business investment decisions (marketing spend, equipment purchases)
Important Considerations
ROI does not account for risk. A higher ROI does not necessarily mean a better investment — you should also consider volatility, liquidity, and the probability of achieving the projected return.
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