What this calculator shows you
- Simple Calculation
- Enter cost and return to see your ROI percentage
- Annualized Returns
- Compare investments of different durations fairly
- Multiple Investments
- Compare ROI across different opportunities
- Include All Costs
- Factor in fees, taxes, and hidden costs
What is ROI?
Return on Investment (ROI) measures how much money you make (or lose) on an investment relative to how much you invested. The basic formula is: ROI = (Current Value - Cost) / Cost × 100. A positive ROI means profit; negative means loss.
Calculating ROI for Different Investments
For stocks, include dividends and capital gains. For real estate, include rental income, appreciation, and costs. For business investments, consider all revenue and expenses. The key is accounting for ALL costs and returns to get an accurate picture.
Annualized ROI for Fair Comparisons
A 50% return over 5 years isn't as good as 50% over 1 year. Annualized ROI accounts for time, allowing fair comparisons. The formula is: Annualized ROI = ((1 + ROI)^(1/years) - 1) × 100. This is essential when comparing investments of different durations.
Questions people ask
What is a good ROI?
It depends on the investment type and risk. The S&P 500 has averaged about 10% a year since 1928 (NYU Stern data). Real estate typically targets 8-12%. Business investments often seek 15-25% or more to justify the risk. Compare ROI to alternatives with similar risk levels.
How do I include fees in ROI calculations?
Subtract all fees from your gains and add transaction costs to your initial investment. For ongoing fees, calculate total fees paid over the investment period. This gives you the true, net ROI.
Education only, not personalized financial, tax or investment advice. Results are estimates based on the numbers you enter; real returns vary and losses happen.