ROI Calculator (Return on Investment)
Calculate the return on any investment with our free ROI calculator. Enter the initial cost and the final value to see your ROI percentage, net profit or loss, annualized return rate, and total return multiple. Works for stocks, real estate, business investments, and any financial decision.
Return on Investment (ROI) is one of the most widely used financial metrics for evaluating the profitability of an investment. The basic ROI formula is: ROI = (Gain - Cost) / Cost * 100%. A positive ROI means the investment was profitable; a negative ROI means it lost money.
For example, if you invested $10,000 and received $15,000 back, your ROI is ($15,000 - $10,000) / $10,000 * 100% = 50%. Your net profit is $5,000.
The annualized return is particularly useful for comparing investments held for different periods of time. A 50% return over 5 years is very different from 50% over 1 year. The annualized return formula is: Annualized Return = (Final Value / Initial Investment)^(1/years) - 1. That same 50% return over 5 years works out to approximately 8.45% annualized.
ROI is used in personal investing (stocks, bonds, real estate), business decisions (marketing campaigns, equipment purchases, hiring), and capital budgeting. While ROI is intuitive and easy to calculate, it does not account for risk, opportunity cost, or the time value of money. For more comprehensive analysis, metrics like Net Present Value (NPV) or Internal Rate of Return (IRR) are used alongside ROI.