Calculate your Return on Investment (ROI) and annualized returns. Compare investment performance and make informed financial decisions.
ROI
+50.00%
Annualized ROI
+14.47%
per year (CAGR)
Enter your investment amounts
Invested
$10,000
Returned
$15,000
Understanding the formulas
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%
| Final Value | Net Profit | ROI | Annualized |
|---|---|---|---|
| $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% |
See how different final values affect your ROI
2 insights based on your inputs
14.5% annualized return beats the historical S&P 500 average of ~10%. Excellent investment!
Always compare investments using annualized ROI (CAGR), not total ROI. A 50% return over 10 years (~4% annual) is worse than 20% over 2 years (~10% annual).
Explore other tools that might help
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.
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.
ROI
+50.00%
Annualized ROI
+14.47%
per year (CAGR)