ROI Calculator
Calculate return on investment (ROI) and annualized ROI from your initial investment and final value.
About the ROI Calculator
Return on investment, or ROI, is the simplest way to measure how well money performed: it compares what you got back to what you put in, expressed as a percentage. This calculator gives you the straightforward total ROI, and — if you provide a holding period — the annualized rate that lets you compare investments held for different lengths of time.
How It Works
The calculator subtracts your initial investment from the final value to get the net gain, then divides that by the initial investment to get total ROI as a percentage. When a holding period in years is provided, it also computes the compound annual growth rate implied by that total return, which is the fair way to compare a 2-year investment against a 10-year one.
ROI = (Final Value − Initial Investment) / Initial Investment × 100. Annualized ROI = [(Final Value / Initial Investment)^(1/years) − 1] × 100.
Worked example
Scenario: $10,000 invested that is worth $14,500 after 3 years.
- Net gain: $14,500 − $10,000 = $4,500.
- ROI = $4,500 ÷ $10,000 × 100 = 45%.
- Annualized ROI = (14,500 ÷ 10,000)^(1/3) − 1 = 13.19% a year.
Result: A 45% total return, equivalent to about 13.19% a year over 3 years.
Interpreting ROI carefully
ROI summarizes gain or loss relative to cost, but it does not by itself account for time, risk, financing, taxes, or cash-flow timing. Two projects can have the same ROI while taking very different amounts of time to produce it.
Tips and common mistakes
- Always compare investments on annualized ROI; 45% over 3 years and 45% over 10 years are very different results.
- Include costs you paid along the way (fees, repairs, commissions) in the initial investment for a true figure.
- Dividends or rent received should be added to the final value.
Assumptions & Limitations
- Assumes a single initial investment and a single final value, with no interim withdrawals or additional contributions.
- Annualized ROI assumes smooth, compound growth across the holding period, which real returns rarely follow exactly.
- Does not account for taxes, fees, or inflation, all of which reduce real-world investment returns.
- Not designed for investments with multiple cash flows in and out — that requires an IRR calculation instead.
Sources and review
Method: ROI = (final value − initial investment) ÷ initial investment; annualized ROI is the compound annual growth rate (CAGR).
Sources:
- Standard definitions of return on investment and compound annual growth rate used in corporate finance textbooks.
Last reviewed: October 2026 by Faheem Ali, founder of CalculatorAnything. The method and examples are provided for transparency; results remain estimates and may contain errors.
Results are estimates for planning and comparison, not financial advice or a lender's quote. Rates, fees, tax rules and regulations vary by country and change over time; confirm figures with your lender or a licensed adviser. Spotted an error? Tell us — see our editorial policy for how corrections are handled.