ROI Calculator
years
months
Net Profit
+2,500
ROI
50.00%
Annualised ROI
22.47%
per year over 2.0y
Total Return Value
7,500
Formula
ROI = (Net Gain / Cost) × 100 = (+2,500 / 5,000) × 100 = 50.00%
About
The ROI Calculator measures the efficiency of an investment by comparing the net gain or loss against the initial cost. A positive ROI means the investment made money; negative means a loss. The annualised ROI adjusts the raw return for the holding period to produce a per-year rate comparable across different investments regardless of how long they were held. This tool supports any asset type — stocks, real estate, business, or any capital outlay.
How to use
- 1 Enter the initial investment amount (cost basis).
- 2 Enter the final value at the time of sale or evaluation.
- 3 Optionally enter the holding period in years to get annualised ROI.
- 4 Include any income received (dividends, rent) in the gain field for total return.
- 5 Compare multiple investments using the results panel.
- What is ROI and how is it calculated?
- ROI (Return on Investment) measures the profitability of an investment as a percentage of its cost. The formula is ROI = (Net Gain ÷ Cost of Investment) × 100, where Net Gain = Final Value − Initial Cost. For example, investing $5,000 and receiving $6,500 gives a net gain of $1,500 and an ROI of 30%.
- What is the difference between ROI and annualised ROI?
- ROI is the total percentage return regardless of how long the investment was held. Annualised ROI converts that total return into a per-year rate, making it comparable across investments of different durations. A 30% ROI over 6 months is far better than a 30% ROI over 5 years — annualised ROI (CAGR) reveals this difference.
- Does ROI account for risk?
- No. ROI only measures the return relative to cost — it does not factor in volatility, probability of loss, or opportunity cost. Two investments with the same ROI can have vastly different risk profiles. For a more complete picture, consider risk-adjusted metrics like the Sharpe ratio, or compare ROI against a benchmark like a market index return for the same period.