Savings & Investing
ROI Calculator
ROI is the simplest way to compare two uses of money, but a raw percentage hides the clock: 40% over six years is not the same as 40% in one. Enter what you put in, what came back, and how long it took to get both the total return and the annualized rate.
Estimates only. Verify important figures against your own records before acting on them. See our disclaimer.
What this calculator includes
What you enter
- Amount invested
- Total value returned
- Holding period (optional)
What you get back
- ROI
- Net gain
- Return multiple
- Annualized return
- Average gain per year
How this calculation works
How this calculation works
ROI compares profit to the money at risk. The annualized figure converts that total return into a compound yearly rate, so a five-year hold can be compared against a one-year one.
- Net gain = value returned − amount invested
- ROI % = net gain ÷ amount invested × 100
- Return multiple = value returned ÷ amount invested
- Annualized return % = (multiple^(1 ÷ years) − 1) × 100
What the result means
ROI is profit measured against the money you put at risk. The annualized return converts that total into a compound yearly rate, which is the only fair way to compare holds of different lengths.
Common mistakes and assumptions
- Comparing raw ROI across different holding periods — use the annualized figure.
- Leaving costs out of the amount invested; fees and improvements belong in it.
- Treating a past annualized return as a forecast.
Worked example
$25,000 invested in equipment that generated $38,500 of value over 3 years.
- 1Net gain = $38,500 − $25,000 = $13,500.
- 2ROI = $13,500 ÷ $25,000 × 100 = 54%.
- 3Return multiple = $38,500 ÷ $25,000 = 1.54.
- 4Annualized return = (1.54^(1 ÷ 3) − 1) × 100 = 15.49% a year.
- 5So a headline 54% return is really about 15.5% a year — the number to compare against other options.
Frequently asked questions
- Should fees be included?
- Yes. Put commissions, closing costs, and setup expenses into the amount invested, and net any selling costs out of the value returned. ROI on gross figures always flatters the deal.
- What is the difference between ROI and annualized return?
- ROI is the total percentage gained over the whole holding period, whatever its length. Annualized return spreads that across the years as a compound rate, which is the only fair way to compare a two-year and a ten-year investment.
- Can ROI be over 100%?
- Yes — it just means you got back more than double what you put in. A 200% ROI is a return multiple of 3.
- Does this handle ongoing income like rent or dividends?
- Add it to the value returned. That gives a correct total ROI, though it treats income as if received at the end; for detailed property returns use the rental cash flow calculator.
Disclaimer
This calculator returns estimates based only on the values you enter. It does not account for taxes, financing terms, local regulations, or conditions specific to your operation, and it is not accounting, legal, tax, or investment advice. Confirm any figure that carries real cost before you rely on it.
Calculations run entirely in your browser and the numbers you type are never sent to us or stored. Read how Answerivo calculators are built.
Formulas and worked example last reviewed .