ROI Calculator
ROI Calculator (Return on Investment)
Calculate your return, profit, and ROI percentage from any investment.
ROI
Profit
Annual Return
What Is ROI (Return on Investment)?
ROI (Return on Investment) measures how much profit you make relative to your initial investment. It is one of the most important metrics used in business, real estate, and investing.
ROI helps you answer a simple question: “Was this investment worth it?”
ROI Formula
A higher ROI means a more profitable investment, while a negative ROI indicates a loss.
ROI Examples
| Investment | Final Value | Profit | ROI |
|---|---|---|---|
| 10,000 | 15,000 | 5,000 | 50% |
| 20,000 | 30,000 | 10,000 | 50% |
| 10,000 | 12,000 | 2,000 | 20% |
| 10,000 | 8,000 | -2,000 | -20% |
ROI Calculator FAQ
ROI (Return on Investment) measures how much profit you make compared to your initial investment.
A good ROI depends on the type of investment, but generally anything above 7% annually is considered strong.
ROI measures total return, while annual return (CAGR) shows how much your investment grows per year.
How to Calculate ROI (Step by Step)
Calculating ROI is simple and can be done in a few steps:
- Determine your initial investment
- Calculate the final value of your investment
- Subtract the initial investment from the final value
- Divide the result by the initial investment
This gives you your ROI as a percentage, which helps you compare different investment opportunities.
What Is a Good ROI?
A “good” ROI depends on the type of investment, risk level, and time horizon.
- 0% – 5% → Low return (low risk)
- 5% – 10% → Solid long-term investment
- 10%+ → Strong performance
Higher ROI often comes with higher risk, so it’s important to balance return and stability.
ROI vs Annual Return (CAGR)
ROI shows your total return, while CAGR (annual return) shows how fast your investment grows each year.
| Metric | What It Measures |
|---|---|
| ROI | Total profit over time |
| CAGR | Average yearly growth |
Two investments can have the same ROI but very different annual returns depending on the time period.
Limitations of ROI
While ROI is useful, it has some limitations:
- Does not account for time (use CAGR instead)
- Ignores risk
- Does not include fees or taxes
For a complete analysis, combine ROI with other metrics like annual return and cash flow.