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FINANCE

ROI Calculator

Calculate return on investment, net profit and annualized return from any initial investment and final value. Numbers update as you type.

Return on investment

50.00%
Net profit$5,000.00
Annualized 14.47%

Context

  • Real return (after ~3% inflation): 11.47% per year.
  • Above the long-term S&P 500 average by 4.47 points (~10%/yr nominal).

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How to use the ROI Calculator

  1. Enter your initial investment. The amount you originally put in — purchase price, principal, capital deployed. If you added money in chunks over time, sum them up; the calculator treats them as a single starting balance.
  2. Enter the final value. Current market value or the price you sold at. For a realistic net ROI, subtract fees, commissions and taxes from this number before typing it.
  3. Add the holding period. Optional but useful — type the years you held the investment. Decimals are fine: 0.5 for six months, 1.25 for fifteen months.
  4. Read the result. ROI percentage is the headline. Net profit and annualized return sit below. The context block compares your annualized return to inflation and the S&P 500 average so the number actually means something.

What is ROI and how is it calculated?

Return on investment (ROI) is the percentage of your initial money you got back as profit. It's the simplest, most universal way to judge whether an investment was worth it — apples to apples between a stock, a rental property, a business venture or a marketing campaign. 

net_profit = final_value − initial_investment
ROI%       = (net_profit / initial_investment) × 100
annualized = ((final / initial) ^ (1 / years) − 1) × 100

Total ROI tells you the whole gain across the holding period; annualized ROI normalizes it to a per-year rate using compound growth. A 50% total return earned over five years is roughly 8.4% annualized, not 10% — annualized is what lets you compare investments of different lengths fairly.

Examples

  • Stock bought at $10,000, sold at $15,000 after 3 years: net profit $5,000, total ROI 50%, annualized ROI ~14.5%. Above the long-term market average.
  • Rental property bought for $200,000, sold for $260,000 after 5 years: net profit $60,000, total ROI 30%, annualized ~5.4%. Decent, especially if it also produced rental income (track that separately).
  • Crypto bought at $5,000, worth $3,500 after 1 year: net profit −$1,500, total ROI −30%, annualized −30%. A loss this year — but volatile assets often need a longer holding period to tell a useful story.

FAQ

What is a good ROI?

It depends on the asset and time period. The US stock market has returned roughly 10% per year on average over the long run; corporate bonds around 5%; cash savings 1–4%. A good ROI beats inflation (around 3% per year) and is competitive with low-risk index investing once you factor in risk.

What is the difference between ROI and annualized ROI?

ROI is the total percentage gain over the entire holding period. Annualized ROI normalizes that gain to a per-year rate by compounding — so a 50% total return over 5 years is roughly 8.4% annualized, not 10%. Use annualized when comparing investments held for different lengths of time.

Should I include fees and taxes in my ROI?

For a realistic picture, yes. Subtract trading commissions, management fees and capital gains tax from your final value before entering it. The number people quote in headlines is usually gross (pre-fee, pre-tax), which overstates what you actually keep.

Can ROI be negative?

Yes. If the final value is less than what you put in, ROI is negative and you have a capital loss. The calculator shows the percentage with a minus sign and colors the result red.

How is ROI different from profit margin?

ROI measures gain as a percentage of the money invested. Profit margin measures gain as a percentage of revenue. A company with a high margin can still have a low ROI if it tied up a lot of capital to produce those sales, and vice versa.

What does the stock market historically return?

The S&P 500 has averaged about 10% per year in nominal terms since 1928. After subtracting roughly 3% per year of inflation, the real return is closer to 7%. Any single year can vary wildly — the long-term average smooths out crashes and booms.

Privacy

Every calculation on this page runs entirely in your browser using JavaScript. Your investment numbers never leave your device — they are not transmitted to any server, not stored in cookies, and not logged. Close the tab and everything is gone.