📈 ROI Calculator

Calculate return on investment (ROI), total profit, and the annualized return rate for any investment given its starting value, ending value, and how long you held it.

Initial Investment ($)

Final Value ($)

Holding Period (years)

ROI and CAGR are different questions

The first measures how much you made; the second measures how fast:

ROI  = (final - initial) / initial x 100
CAGR = ((final / initial)^(1 / years) - 1) x 100

$10,000 grown to $14,000 over three years is $4,000 of profit and a 40% ROI. The annualized figure is not 40 / 3 = 13.33%, though - that ignores compounding. It is 1.4 raised to the power of one third, minus one: 11.87% a year. Compound 11.87% three times over and you are back at $14,000.

Reading the two numbers

Compare with CAGR, judge size with ROI. That same 40% spread over ten years is only 3.42% a year, worse than a savings account. Over six months it is 96% annualized.
Enter part-years as decimals. Eighteen months is 1.5; 90 days is about 0.25. The field accepts steps of 0.1.
Include your costs in the initial figure and your proceeds in the final one - commissions, stamp duty, renovation spend. Leave them out and the return is flattered.

This assumes one payment in and one payment out. If you added or withdrew money along the way, neither number describes what happened - that needs an internal rate of return, which weights each cash flow by how long it was invested.

Frequently asked questions

What is the ROI formula?

Profit divided by the amount invested, times 100. A $10,000 investment worth $14,000 has made $4,000, and $4,000 / $10,000 is 40%.

What is a good annualized return?

Judge it against what the money could have done elsewhere. Roughly 10% a year is the long-run nominal average for US stocks and about 4% for cash, so 11.87% is a solid equity result while the same 40% earned over ten years, at 3.42% a year, has barely beaten inflation.

Can ROI be negative?

Yes. A final value below the initial one gives a negative ROI and a negative CAGR - $10,000 falling to $7,000 is -30% total. The floor is -100%, reached when the position is worth nothing.