ROI CalculatorFree online financial calculator — instant results, no sign-up
Return on investment, total and annualized.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the ROI Calculator
This calculator determines the net gain, total return on investment (ROI), and annualized return for any given asset or project over a specified time horizon. Investors, entrepreneurs, and analysts use it to compare the performance and compound growth rates of different investment opportunities.
- Amount invested
- The initial cost or capital outlay of the investment in dollars, typically greater than zero.
- Amount returned
- The final proceeds or total value received from the investment in dollars.
- Holding period
- The duration the investment was held, entered in years (positive number, can be fractional).
Formula and method
Gain = b − a ROI = (b − a) / a Annualized ROI = ((1 + ROI)^(1 / years) − 1) × 100
- aInitial amount invested
- bFinal amount returned
- GainNet profit or loss in dollars
- ROITotal return on investment expressed as a percentage
- yearsHolding period in years
- Annualized ROIGeometric compound annual growth rate (CAGR) as a percentage
The calculator first subtracts the amount invested from the amount returned to find the net dollar gain. It then divides that gain by the invested amount to obtain the total ROI. Finally, it computes the annualized ROI using the geometric compound annual growth rate formula based on the holding period in years.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Amount invested1000 $
- Amount returned2000 $
- Holding period3 years
Results
- Gain$1,000.00
- ROI100%
- Annualized ROI25.99%
How to use the ROI Calculator
- 1Subtract the amount invested (a) from the amount returned (b) to determine the net gain.
- 2Divide the net gain by the amount invested to compute the decimal total return (r = Gain / a).
- 3Multiply the decimal return by 100 to display the total ROI percentage.
- 4Raise (1 + r) to the power of (1 / years), subtract 1, and multiply by 100 to compute the annualized ROI percentage.
Reading your result
A positive ROI indicates a profitable investment, while a negative ROI represents a loss of capital. The annualized ROI reflects the constant annual compounding rate needed to turn the initial principal into the final amount over the stated holding period, making it easier to compare investments of differing durations.
Limitations
This calculation assumes a single initial cash outflow and a single final payout, ignoring intermittent cash flows, dividends reinvested along the way, or taxes and transaction fees. It also does not adjust for inflation or the volatility and risk profile of the investment.
Common questions
Why is the annualized ROI not just the total ROI divided by the number of years?+
Dividing total ROI by years produces an average simple return, which ignores the effect of compounding. Annualized ROI calculates the geometric compound annual growth rate (CAGR), reflecting how returns compound on prior gains year after year.
Can ROI and annualized ROI be negative?+
Yes. If the amount returned is less than the amount invested, the net gain is negative, resulting in a negative total ROI and a negative annualized rate of return.
Can I enter a holding period of less than one year?+
Yes, you can enter fractional years (for example, 0.5 for six months). Note that annualizing short-term returns assumes that the exact same performance would compound for an entire year, which can magnify short-term volatility.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
Further reading
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Results are estimates for informational purposes and are not financial, medical or legal advice.