Return on Investment (ROI) Calculator — With Annualized ROI
Calculate your return on investment with both basic ROI and annualized ROI (CAGR). Enter your initial investment, total return, and holding period to get your true per-year return rate.
ROI Calculator
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+50.00% ROI
Profit: $5,000 · 1.50x multiplier
Multiplier
1.50x
Annualized
8.45%
The Formula
The ROI formula expresses the net gain or loss as a percentage of the original investment, allowing direct comparison across investments of any size. A $50 profit on a $100 investment shows 50% ROI, just as a $50,000 profit on a $100,000 investment shows 50% ROI. This percentage normalization is what makes ROI the universal language of investment evaluation.
Variable Definitions
Return on Investment
The percentage gain or loss on an investment relative to its cost. A positive value indicates profit; a negative value indicates a loss. ROI is the most widely used profitability metric in finance.
Amount Returned
The total value received from the investment. This includes the return of your original principal plus any gains (or minus any losses). Enter the total you got back, not just the profit.
Amount Invested
The initial capital deployed into the investment. This is your cost basis — the starting point for all ROI calculations. Include all costs associated with the investment, not just the purchase price.
How to Use This Calculator
- 1
Enter the total amount of money you initially put into the investment in the "Amount Invested" field.
- 2
Enter the total amount you received back from that investment in the "Amount Returned" field. This is the final value, not just the profit.
- 3
Optionally enter the holding period in years to see the annualized ROI — the true per-year return accounting for the time your money was invested.
- 4
The calculator instantly outputs your ROI percentage, net profit or loss in dollars, and your investment multiplier.
- 5
Compare investments of different sizes and types using ROI percentage. Use annualized ROI when the holding periods differ.
Common Applications
- Calculate the percentage return on any investment by comparing the total amount returned against the total amount invested.
- Compare investments of different sizes and types on an equal footing using standardized ROI and annualized ROI percentages.
- Evaluate business, stock, real estate, or marketing investments by measuring the profit or loss relative to the capital deployed.
ROI normalizes profit as a percentage of cost, letting you compare a $100 investment against a $1M investment on equal footing
Understanding the Concept
Return on Investment (ROI) is the most universally used profitability metric in finance and business. It answers one essential question: for every dollar I put in, how many dollars did I get back? ROI strips away the raw dollar amounts and expresses performance as a percentage, which makes it possible to compare a $500 investment in a local business against a $500,000 investment in real estate on an equal footing. A positive ROI means your investment grew in value. A negative ROI means it shrank. Investors, business owners, and marketers all use ROI to prioritize where to allocate capital. While ROI is powerful, it does not account for the time an investment was held — a 50% ROI over 2 years (annualized ~22%) is very different from 50% over 10 years (annualized ~4%). For that reason, enter the holding period to see the annualized ROI, which uses the CAGR formula to give you the true per-year return. This makes ROI directly comparable across investments with different time horizons.
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