ROI Calculator

Calculate your return on investment (ROI) to measure the profitability of your investments. Enter your initial investment and final value to see your ROI percentage, net profit, and annualized returns.

💰 Initial Investment

📈 Final Value

📅 Investment Duration (Years)

Optional: Used to calculate annualized ROI for comparing investments over different time periods.

Return on Investment (ROI)

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Net Profit

$—

Annualized ROI

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Investment Summary

Initial Investment $0

Final Value $0

Total Return $0

ROI Interpretation

How ROI is Calculated

📊 ROI Formula

ROI (%) = ((Final Value - Initial Investment) / Initial Investment) × 100

This formula shows your total return as a percentage of your original investment. A positive ROI means profit, while a negative ROI indicates a loss.

💵 Net Profit

Net Profit = Final Value - Initial Investment

Net profit is the absolute dollar amount you gained or lost. This is your actual profit before taxes and fees.

📈 Annualized ROI

Annualized ROI = ((Final Value / Initial Investment)^(1 / Years) - 1) × 100

Annualized ROI shows your average yearly return, making it easier to compare investments with different time periods. Also known as Compound Annual Growth Rate (CAGR).

🎯 Using ROI

ROI is used to evaluate investment performance across stocks, real estate, business ventures, and marketing campaigns. Higher ROI indicates better returns, but always consider risk, time horizon, and opportunity cost when comparing investments.

Frequently Asked Questions

What is a good ROI percentage?

A good ROI depends on the investment type and time horizon. For stocks, 7-10% annualized is typical. Real estate often targets 8-12%. Business investments may aim for 15-25% or higher. Compare your ROI to similar investments and consider the risk level.

How is ROI calculated?

ROI is calculated using the formula: ROI (%) = ((Final Value - Initial Investment) / Initial Investment) × 100. For example, if you invest $10,000 and it grows to $15,000, your ROI is ((15,000 - 10,000) / 10,000) × 100 = 50%.

What is the difference between ROI and annualized ROI?

ROI shows the total return over the entire investment period, while annualized ROI shows the average yearly return. Annualized ROI is useful for comparing investments with different time periods. A 50% ROI over 5 years is 8.45% annualized, which is different from a 50% ROI in 1 year.

Can ROI be negative?

Yes, ROI can be negative if your final value is less than your initial investment. A negative ROI means you lost money. For example, investing $10,000 and ending with $8,000 gives you an ROI of -20%.