ROI Calculator

Calculate the return on investment for any project, asset or business venture. Enter the amount invested and the amount returned to find the ROI, net profit, and annualized return.

$

Total cost including purchase price, fees, and expenses.

$

Final value including sale proceeds, revenue, or maturity amount.

years

Leave at 0 to skip annualized ROI calculation.

ROI Formula

ROI = (Net Profit / Cost of Investment) × 100 Where: Net Profit = Amount Returned − Amount Invested Cost of Investment = Amount Invested Annualized ROI = [(1 + ROI/100)^(1/n) − 1] × 100 Where: n = Investment period in years

ROI is one of the simplest and most widely used profitability metrics. It expresses the gain or loss from an investment as a percentage of the original cost, making it easy to compare different investments regardless of their size. The annualized version adjusts for time, enabling fair comparison between short-term and long-term investments.

How to Use the ROI Calculator

1

Enter the Amount Invested

This is the total cost of the investment — the purchase price plus any fees, commissions, or additional expenses. For example, if you bought stock for 48,000 and paid 2,000 in fees, enter 50,000.

2

Enter the Amount Returned

This is the total value you received back — sale proceeds, maturity amount, or final value. If you sold stock for 71,000 and received 1,000 in dividends, enter 72,000.

3

Enter the Investment Period (Optional)

Enter how long you held the investment in years to calculate the annualized ROI. This lets you compare investments of different durations fairly. Leave at 0 to see only the simple ROI.

4

Click "Calculate ROI"

The calculator instantly shows the ROI percentage, net profit, and (if you entered a period) the annualized ROI for time-adjusted comparison.

Example Calculation

50,000 invested, returned 72,000 after 3 years

Given:

  • Amount Invested = 50,000
  • Amount Returned = 72,000
  • Investment Period = 3 years

Step 1: Calculate Net Profit

Net Profit = 72,000 − 50,000 = 22,000

Step 2: Calculate ROI

ROI = (22,000 / 50,000) × 100 = 44.00%

Step 3: Calculate Annualized ROI

Annualized ROI = [(1 + 0.44)^(1/3) − 1] × 100
= [1.44^0.3333 − 1] × 100
= [1.1292 − 1] × 100
= 12.92%

Result: ROI = 44.00% | Annualized ROI = 12.92%

Net Profit = 22,000

While the total return is 44%, the annualized return of 12.92% gives a fairer picture for comparison with other investments.

Understanding the Results

ROI (Return on Investment)

The total return expressed as a percentage of the amount invested. An ROI of 44% means you earned 44 cents for every dollar invested. This is the simplest profitability measure but does not account for how long the investment was held.

Annualized ROI

Converts the total ROI into an equivalent yearly rate. A 44% return over 3 years equals roughly 12.92% per year. This is essential for comparing investments held for different durations — a 44% return over 3 years is very different from 44% over 1 year.

Net Profit

The absolute dollar gain or loss. While ROI gives a percentage, net profit tells you the actual amount of money made. A 22,000 profit on a 50,000 investment is meaningful in absolute terms regardless of the percentage.

Important Considerations

Simple ROI does not account for the time value of money, inflation, taxes, or risk. Always consider annualized ROI for time-adjusted comparison, and factor in taxes and inflation for real-world profitability assessment.

Key Definitions

ROI

Return on Investment — a profitability ratio that measures the gain or loss generated relative to the amount invested, expressed as a percentage.

Annualized ROI

The total ROI converted to an equivalent yearly rate, enabling fair comparison between investments of different holding periods.

Net Profit

The difference between the amount returned and the amount invested. Positive net profit means a gain; negative means a loss.

Cost of Investment

The total amount of money put into an investment, including purchase price, fees, commissions, and any other associated costs.

Amount Returned

The total value received from an investment — sale proceeds, revenue, dividends, interest, or maturity value.

Holding Period

The length of time an investment is held. Critical for calculating annualized returns and comparing investments fairly.

Frequently Asked Questions

ROI (Return on Investment) is a performance measure that evaluates the efficiency or profitability of an investment. It is calculated as (Net Profit / Cost of Investment) × 100 and expressed as a percentage. For example, if you invest 10,000 and get back 12,000, your ROI is 20%. ROI is universally used because of its simplicity — anyone can understand a single percentage that tells you how much you made relative to what you put in.
Profit is the absolute dollar amount gained — 2,000 profit on a 10,000 investment. ROI expresses that profit as a percentage of the original investment — 20% ROI. The percentage format makes it possible to compare investments of different sizes. A 2,000 profit on 10,000 (20% ROI) is better than a 5,000 profit on 50,000 (10% ROI), even though the dollar profit is smaller.
A "good" ROI depends heavily on the context. For the stock market, the long-term average annual ROI is about 7–10% (after inflation, about 5–7%). Real estate typically targets 8–12% annually. Business investments and startups often target 20%+ to justify the higher risk. Marketing campaigns might target 300%+ ROI because the investment is relatively small. Always compare against your specific industry benchmark and risk-adjusted hurdle rate rather than a universal number.
Annualized ROI converts the total ROI into an equivalent annual rate. A 50% total ROI over 5 years equals about 8.45% annualized, while the same 50% over 1 year is 50% annualized. Without annualizing, you cannot fairly compare these two investments. Annualized ROI uses the formula: [(1 + ROI/100)^(1/years) − 1] × 100.
ROI has several key limitations: (1) It doesn't account for time — a 50% ROI over 1 year is far better than 50% over 10 years (use annualized ROI to fix this). (2) It ignores inflation — a 10% ROI with 5% inflation is really only 5% in purchasing power. (3) It doesn't factor in risk — a 20% ROI on a risky venture may be worse than a 12% ROI on a safe investment. (4) It doesn't account for the timing of cash flows within the holding period. For more sophisticated analysis, consider NPV, IRR, or risk-adjusted returns like the Sharpe ratio.
Yes. A negative ROI means you lost money on the investment. For example, investing 10,000 and getting back only 8,000 gives a net profit of −2,000 and an ROI of −20%. A negative ROI clearly signals the investment did not meet expectations and resulted in a loss of capital.
If the amount invested is in cell A1 and the amount returned is in cell B1:

Simple ROI: =(B1-A1)/A1 then format as percentage.

Annualized ROI (if years are in C1): =(B1/A1)^(1/C1)-1 then format as percentage.

Net Profit: =B1-A1

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