ROI (Return on Investment) Calculator

Return on investment (ROI) is the simplest way to measure whether something was worth the money — an investment, a project, a marketing spend, anything. This ROI calculator tells you your return as a percentage and in dollars, and — crucially, when investments run over different time spans — the annualized return, so you can compare opportunities on a fair, like-for-like basis.

How ROI works

ROI compares your gain to what you put in. The basic figure ignores time, which is fine for comparing things over the same period — but a 50% return over ten years is very different from 50% in one year. That’s why annualizing matters: it converts any return into the equivalent steady yearly rate, letting you compare a quick win against a long hold.

The formulas

Basic ROI is (Final value − Amount invested) ÷ Amount invested × 100. The annualized (compound) return is ((Final ÷ Invested)^1/years − 1) × 100, which expresses the result as a single yearly growth rate. Net profit is simply Final value minus Amount invested.

A worked example

Invest $10,000 and it grows to $13,500 over 3 years. Your total ROI is 35% and your net profit is $3,500. But the annualized return is about 10.5% a year — that’s the figure to compare against, say, a different investment that returned 20% in a single year (which is clearly stronger on an annual basis despite the smaller headline number). Comparing annualized returns prevents long, slow gains from looking better than they are.

Where to use it

ROI works for stocks, real estate, a side business, equipment, training, or marketing — anywhere you can put a number on what went in and what came out. For investments that grow through compounding over time, pair this with our compound interest calculator to project future value, and read how to calculate ROI for more examples and pitfalls.

Frequently asked questions

How do I calculate ROI?

Subtract the amount you invested from the final value to get your net profit, divide that by the amount invested, and multiply by 100 for a percentage. For example, turning $10,000 into $13,500 is a $3,500 profit, or a 35% ROI. The calculator does this instantly and also annualizes it.

What is annualized return and why does it matter?

Annualized return expresses a total gain as an equivalent steady yearly rate, using ((Final/Invested)^(1/years) − 1) × 100. It lets you fairly compare investments held for different lengths of time — a 35% return over 3 years is about 10.5% per year, very different from 35% in one year.

Does ROI account for risk and time?

Basic ROI does not — it ignores how long the investment took and how much risk you took on. That's why annualizing helps with time, but you should still weigh the return against the risk involved. A high ROI from a very risky or very long investment isn't necessarily a good deal.

Can I use this for business or marketing ROI?

Yes. Enter the cost as your investment and the value gained (revenue or value generated) as the final value to get a percentage return. Just remember it's a simplified measure; real business decisions also weigh ongoing costs, risk, and timing. This tool is for educational use only.