ROI Calculator
Find the return on investment percentage from an initial cost and final value, plus the annualized return if you know the holding period.
The formula
ROI (%) = (Final value − Initial investment) ÷ Initial investment × 100. This gives the total return over the whole holding period, regardless of how long that period was.
- Annualized return (CAGR) = ((Final value ÷ Initial investment)^(1 ÷ years) − 1) × 100 — this spreads the total return evenly across each year, making returns over different time periods comparable.
Worked example
An investment of 10,000 that grows to 14,500 over 3 years has a net gain of 4,500 and a total ROI of 45%. Spread evenly, that works out to an annualized return of about 13.19% per year.
Why annualized return matters
A 45% total ROI sounds identical whether it happened in 1 year or 10 years, but those are very different outcomes. Annualizing the return lets you fairly compare investments held for different lengths of time.
Frequently asked questions
Does ROI account for fees, taxes, or inflation?
No — this is a simple gross comparison of final value versus initial cost. For a more realistic picture, subtract any fees or taxes from your final value before entering it, or account for inflation separately.
What's a 'good' ROI?
It depends entirely on the investment type, risk level, and time period — there's no single benchmark. Comparing the annualized return against a relevant reference (like a savings account rate or a market index) is usually more meaningful than judging ROI in isolation.