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ROI Calculator

What you put in, what it's worth now — ROI percentage, net profit, and the annualized rate for fair comparison.

Buğra SözeriFinance
Updated · Published
Reviewed by Convertitive Finance Desk
Financial disclaimer: This calculator is for educational purposes only and is not financial advice. Verify all figures with a qualified financial professional before acting on them. Past returns do not predict future results.

Return on investment (ROI) is the single most common way to express how well — or badly — an investment performed. It answers one question: for every dollar you put in, how much did you get back? The calculator below takes two numbers — what you originally invested and what it's worth today — and returns the ROI as a percentage along with your net profit in dollars. Add an optional holding period in years and it also computes the annualized ROI (the compound annual growth rate), which is the only fair way to compare a stock you held for 6 months against a fund you held for 10. For the broader picture of how money grows over time, see our compound interest calculator.

ROI
+20%
Net profit
+$200.00
Annualized ROI
+9.54%

ROI is undefined when the initial investment is zero. Annualized ROI appears only when you enter a holding period greater than zero. These figures are for educational purposes only and are not financial advice.

How to use

  1. Enter your initial investment

    The total amount you originally put in — the purchase price plus any fees or costs that formed your cost basis.

  2. Enter the final value

    What the investment is worth now (or what you sold it for). For income-producing assets, add any dividends or interest received to this figure.

  3. Optionally enter the holding period

    The number of years you held the investment. Leave it blank for a plain ROI; fill it in to also see the annualized ROI for cross-comparison.

Worked examples

InitialFinalYearsROIAnnualized
$1,000$1,2002+20%+9.54%
$1,000$2,0005+100%+14.87%
$1,000$8001−20%−20%
$5,000$5,00030%0%

Frequently asked questions

What is ROI?
Return on investment is the gain or loss on an investment relative to its cost, expressed as a percentage. The formula is (final value − initial investment) ÷ initial investment × 100. A $1,000 investment now worth $1,200 has a +20% ROI.
How is ROI calculated in this tool?
ROI % = (final value − initial value) ÷ initial value × 100. Net profit is simply final value − initial value in dollars. Both update as you type. If the initial investment is zero, ROI is undefined (you can't divide by a zero cost basis) and the tool shows a dash.
What's the difference between ROI and annualized ROI?
Plain ROI ignores time — a +50% total return looks identical whether earned in 1 year or 10. Annualized ROI (the compound annual growth rate) restates the gain as the equivalent constant yearly rate: ((final ÷ initial)^(1/years) − 1) × 100. Always compare investments held for different periods using the annualized figure, not the raw ROI.
How is ROI different from IRR?
ROI and annualized ROI assume a single amount in at the start and a single amount out at the end. Internal rate of return (IRR) handles multiple cash flows in and out at different times — recurring contributions, partial withdrawals, irregular dividends. For a simple buy-and-hold, annualized ROI and IRR coincide; for staggered cash flows you need a true IRR calculation, which this tool does not perform.
Can ROI be negative?
Yes. Whenever the final value is below your initial investment, ROI is negative — a loss. A $1,000 investment now worth $800 has a −20% ROI. The annualized ROI is negative too in that case.
Should I include fees, taxes, and dividends?
For an accurate picture, add purchase fees to your initial investment and include reinvested dividends or interest in the final value. The result here is pre-tax; in a taxable account your after-tax ROI will be lower once capital gains and dividend taxes are applied.

About

Why annualizing matters

A 100% total return sounds spectacular, but earned over 20 years it's an annualized 3.5% — below many savings accounts. Annualized ROI strips out the length of the holding period so you can line up any two investments on the same yearly scale. It's the same math as compound annual growth rate (CAGR).

What this tool is not

It is not an IRR or net-present-value calculator. It assumes one lump sum invested at the start and one value at the end, with no intermediate cash flows. For dollar-cost-averaging, irregular contributions, or mid-period withdrawals, the simple ROI here will overstate or understate the true rate of return.

Sources & references

Authoritative references behind the math, constants, and tables on this page. Verified by Buğra Sözeri on the dates shown and re-checked at every deploy.