ROI Calculator

Calculate your Return on Investment (ROI) and annualized returns. Compare investment performance and make informed financial decisions.

Investment Returns

ROI

+50.00%

Annualized ROI

+14.47%

per year (CAGR)

Net Profit$5,000
Total Return$15,000
Investment Period3 years

Investment Details

1,000100,000
0200,000
years

Investment Comparison

Invested

$10,000

Returned

$15,000

ROI Breakdown

Initial Investment$10,000
Final Value$15,000
Net Profit+$5,000

How ROI is Calculated

Simple ROI Formula:

ROI = ((Final Value - Initial Investment) / Initial Investment) × 100

ROI = (($15,000 - $10,000) / $10,000) × 100 = 50.00%

Annualized ROI (CAGR) Formula:

CAGR = ((Final Value / Initial Investment)^(1/years) - 1) × 100

CAGR = (($15,000 / $10,000)^(1/3) - 1) × 100 = 14.47%

Compare Different Scenarios

Final ValueNet ProfitROIAnnualized
$8,000-$2,000-20.0%-7.2%
$10,000+$0+0.0%+0.0%
$12,500+$2,500+25.0%+7.7%
$15,000+$5,000+50.0%+14.5%
$20,000+$10,000+100.0%+26.0%

Quick Answer

ROI (Return on Investment) measures the profitability of an investment as a percentage. The formula is: ROI = (Gain - Cost) / Cost × 100. For example, investing $1,000 and gaining $1,200 gives ROI = ($1,200 - $1,000) / $1,000 × 100 = 20%. Calculate any investment ROI instantly at practicalwebtools.com.

Key Facts

  • ROI formula: (Gain - Cost) / Cost × 100%
  • ROI expresses return as a percentage for easy comparison
  • Annualized ROI adjusts for different time periods
  • ROI does not account for risk - higher ROI often means higher risk
  • A 100% ROI means you doubled your money
  • Negative ROI means you lost money on the investment
  • Compare ROI across investments of similar risk and time horizon

Frequently Asked Questions

ROI measures the profitability of an investment relative to its cost. It's calculated as (Net Profit / Investment Cost) × 100. A 50% ROI means you earned 50 cents for every dollar invested.
Annualized ROI (CAGR) shows the equivalent annual return rate, making it easier to compare investments of different lengths. A 3-year investment with 50% total ROI has an annualized ROI of about 14.5%.
A "good" ROI varies by investment type. Stock market historically returns 7-10% annually. Real estate: 8-12%. Savings accounts: 1-5%. High-risk investments may target 15%+. Always compare to similar investments and consider risk.
Profit is the absolute dollar amount gained. ROI is the percentage return relative to the investment. A $10,000 profit on a $100,000 investment (10% ROI) is different from $10,000 on a $50,000 investment (20% ROI).
ROI doesn't account for time (use annualized ROI), risk, opportunity cost, or external factors like inflation. It also doesn't consider cash flow timing or reinvestment. Use alongside other metrics for better decisions.