ROI Calculator
Return on investment, plus the annualised rate.
Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths
Your values
ⓘ Live results
- ROI
- 45%
- Annualised return
- 13.19%
- Net gain
- $4,500.00
- Multiple on invested capital
- 1.45×
Working
- 1ROI = ($14,500.00 − $10,000.00) ÷ $10,000.00 × 100 = 45%
Quick answer
Return on investment (ROI) is (final value − amount invested) ÷ amount invested × 100. Annualized ROI spreads that return over the holding period: (final value ÷ amount invested)^(1 ÷ years) − 1. Turning $10,000 into $14,500 is a 45% ROI; over three years that equals 13.19% a year, compounded.
What the ROI calculator does
This calculator measures how much an investment gained or lost relative to what you put in, as a total percentage, a dollar gain and a multiple of the money invested. It then annualizes the result, which is what lets you compare a three-year property project with a one-year marketing campaign or a stock you held for seven years.
Use it for any single outlay with a measurable end value: shares, a rental property, a franchise, equipment, a marketing campaign or a training program. The final value should include everything you got back, such as sale proceeds plus any income received along the way.
ROI ignores timing within the period. If money went in or came out at several points, the IRR calculator gives a more accurate annual rate. For the time it takes to recover the original outlay, see the payback period calculator.
The formula
ROI = (V − C) ÷ C × 100 Annualized ROI = ((V ÷ C)^(1 ÷ n) − 1) × 100 Multiple = V ÷ C
| Symbol | Meaning | Unit |
|---|---|---|
| C | Total amount invested, including fees, commissions and acquisition costs | $ |
| V | Final value: current value or sale proceeds plus any income received, net of selling costs | $ |
| n | Holding period | years |
Annualized ROI is the same calculation as the compound annual growth rate (CAGR) and assumes a single investment at the start and a single value at the end. It does not adjust for inflation or taxes, so for a real (inflation-adjusted) return, subtract inflation or use the inflation calculator. For marketing ROI, use the gross profit generated, not revenue, as the return; revenue-based figures overstate the payoff.
Worked examples
Email marketing over one year
A shop spent $2,500 on an email platform and design time over 12 months; the campaigns produced $11,000 of gross profit from attributed sales.
Inputs
- Amount invested2500 $
- Final value11000 $
- Holding period1 years
Result
- ROI340%
- Annualised return340%
- Net gain$8,500.00
- Multiple on invested capital4.4×
340% ROI, a 4.4× multiple. Attribution is the weak point: if some of those customers would have bought anyway, the true return is lower, so test with a holdout group where you can.
Franchise held for seven years
An owner invested $250,000 in a franchise (fee, fit-out, working capital). After seven years, profits taken out plus the sale price came to $410,000.
Inputs
- Amount invested250000 $
- Final value410000 $
- Holding period7 years
Result
- ROI64%
- Annualised return7.32%
- Net gain$160,000.00
- Multiple on invested capital1.64×
A 64% total return looks large, but it is only about 7.3% a year. Because profits were received along the way rather than at the end, the IRR would be higher; it would also fall if the owner's own working hours were costed.
Investment that lost money
$8,000 put into a stock that is worth $6,200 two years later.
Inputs
- Amount invested8000 $
- Final value6200 $
- Holding period2 years
Result
- ROI-22.5%
- Annualised return-11.97%
- Net gain-$1,800.00
- Multiple on invested capital0.78×
A 22.5% loss, or about −12% a year. To get back to $8,000 the holding now needs to rise by about 29%, because a percentage loss requires a larger percentage gain to recover.
Why annualized ROI matters
A total ROI says nothing about how long the money was tied up. Both investments below have the same 50% total return, but very different annual rates.
| Total ROI | Years held | Annualized ROI |
|---|---|---|
| 50% | 1 | 50.0% |
| 50% | 3 | 14.5% |
| 50% | 5 | 8.4% |
| 50% | 10 | 4.1% |
What to count as cost and return
- Cost: purchase price plus fees, commissions, taxes on purchase, setup costs and any extra capital you added later.
- Return: sale price or current market value, minus selling costs, plus income received (dividends, rent, profit distributions).
- Marketing and projects: use incremental gross profit, not revenue, and include staff time if you want a full-cost ROI.
- Real estate: leverage changes the picture. ROI on the cash you put in can be very different from ROI on the property price; the cash-on-cash return calculator handles financed rentals.
ROI vs CAGR, IRR and ROAS
- CAGR is the annualized ROI shown here, applied to any starting and ending value; the CAGR calculator works with values that are not investments, such as revenue.
- IRR accounts for several cash flows at different dates and is the right measure for projects with ongoing income or staged investment.
- ROAS (return on ad spend) divides revenue by ad spend, so a ROAS of 4 is not the same as a 400% ROI: product and other costs have not been deducted.
How to use the ROI Calculator
- 1Enter the total amount invested, including fees and any extra capital added during the period.
- 2Enter the final value: what it is worth or sold for, after selling costs, plus income received.
- 3Enter the holding period in years; use decimals for part years (18 months = 1.5).
- 4Read the total ROI, the annualized return, net gain and the multiple on invested capital.
Frequently asked questions
How do you calculate ROI?
Subtract the amount invested from the final value, divide by the amount invested and multiply by 100. $5,000 growing to $6,500 is ($6,500 − $5,000) ÷ $5,000 × 100 = 30%.
What is a good ROI?
It depends on the risk and the time involved. Compare the annualized figure with what you could earn elsewhere at similar risk, such as a broad index fund or a savings account, rather than with a single fixed number.
How do I annualize ROI?
Divide the final value by the amount invested, raise it to the power of 1 ÷ years and subtract 1. A 45% gain over 3 years is 1.45^(1/3) − 1 = 13.19% a year.
Can ROI be negative?
Yes. A negative ROI means the investment is worth less than you put in; −20% means you lost a fifth of your money.
Does ROI include taxes and inflation?
Not unless you include them. Deduct taxes paid from the final value for an after-tax ROI, and subtract the inflation rate from the annualized figure for an approximate real return.
References
- Principles of Corporate Finance (Brealey, Myers & Allen) — McGraw Hill
- Investor.gov – Introduction to Investing — US Securities and Exchange Commission
About this calculator
- Built and reviewed by the Calculation Machine team · How we build and test calculators
- Last reviewed: October 24, 2026
- Report an error