ROI Calculator
Calculate return on investment and annualized returns
Last updated: January 2025
About This Tool
Return on Investment (ROI) is the most fundamental metric for evaluating whether an investment is worthwhile. This calculator helps you measure the efficiency of your investments and compare different opportunities.
What is ROI Calculator?
ROI measures the gain or loss generated relative to the amount invested. Expressed as a percentage, it shows how much profit (or loss) you made compared to your initial investment. A positive ROI means you made money; negative means you lost money.
How It Works
ROI is calculated by taking the difference between the final value and initial investment, dividing by the initial investment, then multiplying by 100 to get a percentage. For investments held over time, you can also calculate annualized ROI to compare investments of different durations.
Formula
ROI = (Final Value - Initial Investment) / Initial Investment x 100
Investment Details
Total ROI
+50.00%
1.50x your initial investment
Annualized Returns
How Does It Compare?
📊 ROI Formula
ROI = (Final Value - Initial Investment) / Initial Investment × 100Related Tools
When to Use This Calculator
- 1Evaluating potential investments before committing capital
- 2Comparing different investment opportunities
- 3Measuring the performance of past investments
- 4Justifying business expenditures to stakeholders
- 5Analyzing the effectiveness of marketing campaigns
Pro Tips
- •Always compare ROI to a benchmark (like market average or inflation)
- •Use annualized ROI when comparing investments of different time periods
- •Consider both risk and return, not just ROI alone
- •Factor in all costs including fees, taxes, and opportunity costs
- •Be consistent in how you calculate ROI across comparisons
Common Mistakes to Avoid
- •Ignoring the time factor when comparing investments
- •Not accounting for all costs (fees, taxes, maintenance)
- •Comparing nominal ROI without adjusting for inflation
- •Focusing only on ROI without considering risk
- •Using inconsistent calculation methods across comparisons