ROI Calculator
This ROI calculator works out your return on investment two ways: the total percentage gain over the whole holding period, and the annualized rate that makes returns comparable across investments held for different lengths of time. Enter what you paid, what it's worth now (or what you sold it for), and how long you held it, to see both figures side by side — useful for evaluating any investment, business decision, or major purchase.
What you originally paid or invested — the purchase price, initial capital, or amount spent.
What the investment is worth now, or what you sold it for — enter a smaller number than the cost if the investment lost value.
How long you've held the investment — used to work out the annualized (per-year) return alongside the total return.
ROI (total return)
80.00%
The total percentage gain (or loss) on your original cost — e.g. $10,000 growing to $18,000 is an 80% ROI, however long it took.
The steady per-year rate that explains your return — more useful than total ROI for comparing investments held different lengths of time.
The actual money made (or lost) — current value minus what you originally put in.
How many times over your money grew — a multiple of 1.8 means every $1 became $1.80.
How to use this roi calculator
- 1Cost of investment: what you originally paid, including any costs to acquire it if relevant (fees, closing costs, etc., for a fuller picture).
- 2Current or final value: what it's worth today, or what you actually received when you sold or exited — use a figure lower than the cost if you lost money, ROI handles negative returns correctly.
- 3Time held: needed only for the annualized figure — total ROI alone doesn't need this, but two investments with the same total ROI held for very different periods are not equally good.
- 4Always compare annualized ROI, not total ROI, when judging between investments held for different lengths of time — a 50% return over 10 years is far worse than 50% over 2.
Understanding your results
ROI (total return) is the simplest, most literal measure — the percentage gain on your original cost, regardless of how long it took. Annualized ROI compounds that same gain into a single steady yearly rate, which is the fair way to compare a 4-year investment against a 10-year one. Net gain converts the percentage into an actual currency amount, which often matters more practically than the percentage alone. Return multiple is the raw multiple your money achieved — intuitive for quickly grasping the scale of a return ('nearly doubled' reads faster than '80%').
The formula
ROI = ((Value − Cost) ÷ Cost) × 100 · Annualized ROI = ((Value ÷ Cost)^(1/years) − 1) × 100Total ROI is a simple percentage change — no time dimension, just gain over original cost. Annualized ROI applies the same compounding logic as CAGR: it finds the single constant yearly rate that, compounded over the holding period, reproduces the same total return. The two numbers can tell very different stories — an 80% total ROI sounds impressive, but if it took 20 years to achieve, the annualized rate is under 3%, barely ahead of typical inflation.
A worked example
An investment costing $10,000, now worth $18,000, held for 4 years: total ROI is (18,000 − 10,000) ÷ 10,000 × 100 = 80%. The annualized ROI, using the compounding formula, works out to about 15.83% per year — the steady rate that would turn $10,000 into $18,000 over exactly 4 years. Net gain is $8,000, and the return multiple is 1.8× — every dollar invested became $1.80. Compare this to an investment with the same 80% total ROI held for 10 years instead: its annualized rate would only be about 6.05% — a much less impressive result once time is properly accounted for.
Notes for the UK, US and India
ROI is used identically across the UK, US and India as a universal, currency-agnostic measure — there's no market-specific convention to adjust for. It's worth noting ROI as calculated here is a pre-tax, pre-fee figure; real-world investment returns are often reduced by capital gains tax (varying significantly by country and holding period), transaction costs, and — for property or business investments — ongoing running costs not captured by a simple cost-vs-value comparison. For a fuller picture on recurring investments like mutual fund SIPs, use XIRR instead of simple ROI, since ROI assumes a single lump-sum entry and exit.
Frequently asked questions
What is a good ROI?+
It depends entirely on the asset class and time period — a 'good' ROI for a savings account (a few percent annualized) is very different from a 'good' ROI for equity investing (historically 8–12% annualized long-run) or a fast-flip business deal. Compare annualized ROI against realistic benchmarks for that specific asset type.
What's the difference between ROI and CAGR?+
ROI (total) measures the overall percentage gain regardless of time; CAGR (and this calculator's 'annualized ROI') expresses that same gain as a compounding yearly rate. They describe the same underlying investment from two different angles — always check which one you're being quoted.
How do I calculate ROI on a business or real estate investment?+
Use total money invested (including improvement costs, fees, etc.) as the cost, and the current market value or sale price as the value — the same formula applies. For real estate, remember to also account for ongoing costs (maintenance, taxes) not captured in a simple ROI figure, ideally via a dedicated real estate ROI calculation.
Can ROI be negative?+
Yes — enter a final value lower than the cost and the calculator correctly shows a negative ROI and negative annualized return, reflecting a loss on the investment.
Should I use ROI or IRR for an investment with multiple cash flows?+
ROI (and this calculator) assumes a single investment and a single exit value — for investments with multiple contributions or withdrawals over time (like a SIP or a business with periodic reinvestment), IRR (Internal Rate of Return) is the correct measure, since it accounts for the timing of each cash flow.