CalcWealth

Free ROI Calculator — Return on Investment

Enter your investment cost and final value to instantly calculate ROI percentage, net profit, and annualized return. Works for stocks, real estate, business investments, and any other asset.

Use this free ROI calculator to measure the return on any investment in seconds. Calculates total ROI and annualized ROI (CAGR) — the two metrics you need to compare any investment to any other, regardless of how long you held it. No sign-up required.

What Is ROI (Return on Investment)?

ROI (Return on Investment) is the percentage gain or loss generated by an investment relative to its cost. It is the most universally understood measure of investment performance — applicable to stocks, real estate, business ventures, marketing campaigns, and any other use of capital.

A 50% ROI means you earned 50 cents for every dollar you invested. A −20% ROI means you lost 20 cents per dollar. ROI makes it easy to compare the profitability of completely different types of investments on the same scale.

For time-based comparisons, annualized ROI (the rate at which an investment must grow each year to produce the actual total return) is the more useful metric. This is mathematically identical to CAGR.

How to Use This ROI Calculator

  1. 1

    Enter the Initial Investment

    The total amount you paid for the investment — purchase price, plus any acquisition costs (broker fees, closing costs, setup costs). This is your cost basis.

  2. 2

    Enter the Final Value

    The current or final value of the investment. For stocks: current market value. For real estate: sale price. For a business project: total revenue generated. Include any income received (dividends, rent).

  3. 3

    Enter the Time Period (optional)

    The number of years you held the investment. Required to calculate annualized ROI. Without it, only the total ROI is calculated.

  4. 4

    Compare the Results

    The calculator shows total ROI %, net profit in dollars, and annualized ROI. Use annualized ROI to compare investments held for different periods — the fairest apples-to-apples comparison.

ROI Formula Explained

ROI = (Net Profit / Cost of Investment) × 100

Example: Buy stock for $10,000, sell for $14,500: ROI = (4,500 / 10,000) × 100 = 45%

Annualized ROI = [(1 + ROI/100)^(1/n) − 1] × 100

Example: 45% ROI over 4 years: Annualized ROI = [(1.45)^(0.25) − 1] × 100 = 9.74% per year

Real-World ROI Examples

Use these as benchmarks for your own investments.

Stocks: $10,000 investment → $14,500 sale

Buy $10,000 of S&P 500 index fund, sell for $14,500 after 4 years: ROI = 45%, net profit = $4,500. Annualized ROI = 9.74% per year — close to the historical nominal S&P 500 average of 10.5%.

Real Estate: $200,000 property → $310,000 sale after 5 years

Buy property for $200,000, sell for $310,000 after 5 years: ROI = 55%, net profit = $110,000. Annualized ROI = 9.17% — competitive with equities and not including rental income which would push the total return significantly higher.

Business: $50,000 marketing spend → $185,000 revenue generated

Spend $50,000 on a digital marketing campaign that generates $185,000 in attributable revenue: ROI = 270%, net profit = $135,000. This 270% ROI in a single quarter shows why digital marketing ROI tracking is essential for every business budget decision.

Frequently Asked Questions

What is ROI (return on investment)?
ROI (Return on Investment) is the percentage gain or loss on an investment relative to its cost. It measures the efficiency of an investment — a 50% ROI means you earned 50 cents for every dollar invested. ROI = (Net Profit / Cost of Investment) × 100. It is the most widely used metric for quickly comparing investment profitability across different types of assets.
How do you calculate ROI?
ROI = (Final Value − Initial Investment) / Initial Investment × 100. For example: buy $10,000 of stock, sell for $14,500 → Net profit = $4,500; ROI = (4,500 / 10,000) × 100 = 45%. For investments with income (dividends, rent), add that income to the final value before calculating.
What is a good ROI?
A good ROI depends on the asset type and time horizon. For stocks: 7–10% annualized (historical S&P 500 returns). For real estate: 8–12% annualized including appreciation and rental income. For business investments: the ROI should exceed your cost of capital (typically 10–15%). Any ROI below the inflation rate (~3%) means you are losing purchasing power.
What is the difference between ROI and annualized ROI?
ROI measures total return over the entire holding period without regard to time. Annualized ROI (also called CAGR) converts that total return into an equivalent annual rate, making it comparable across different time horizons. A 100% total ROI over 10 years equals an annualized ROI of 7.2% — very different from 100% ROI in 1 year (100% annually). Always use annualized ROI to compare investments held for different periods.
How is annualized ROI calculated?
Annualized ROI = [(1 + ROI/100)^(1/n) − 1] × 100, where n = number of years held. For example, a 50% total ROI over 5 years: Annualized ROI = [(1 + 0.50)^(1/5) − 1] × 100 = 8.45% per year. This is mathematically identical to CAGR and lets you compare any two investments on equal footing.
What is a negative ROI?
A negative ROI means you lost money on the investment. If you invest $10,000 and it falls to $7,500, your ROI = (7,500 − 10,000) / 10,000 × 100 = −25%. In business contexts, a negative ROI project (where costs exceed benefits) should be avoided or restructured. In investing, negative ROI periods are common in volatile assets like stocks and real estate.
Does this ROI calculator account for taxes and fees?
No — this calculator computes gross ROI before taxes and transaction costs. For a more accurate after-tax ROI: subtract brokerage fees from your final value and apply your capital gains tax rate (0%, 15%, or 20% for long-term in the US; ordinary income rate for short-term). After-tax ROI = Gross ROI × (1 − tax rate).

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