Return on Investment Calculator
ROI on its own is incomplete: doubling your money is excellent in two years and unremarkable in twenty. Enter the holding period and the annualised figure appears alongside, which is the number that lets you compare one investment against another.
Your inputs
Your result
Formula
Always ask over what period
A fifty percent return is the headline; the holding period decides whether it is good. Fifty percent over two years is roughly twenty-two percent a year, which is excellent. The same fifty percent over fifteen years is under three percent a year, which barely keeps pace with inflation. Any return quoted without a period is incomplete, and often deliberately so.
Include everything on both sides
The invested figure should include fees, commissions and any subsequent money you put in. The returned figure should include income received along the way — dividends, rent, interest — not just the sale proceeds. Leaving out costs is the most common way ROI gets quietly inflated.
ROI ignores risk entirely
Two investments with the same ROI are not equivalent if one could plausibly have gone to zero. ROI is a measure of what happened, not of what was likely to happen, and comparing returns without reference to the risk taken to earn them is how bad decisions get justified after the fact.
And it ignores timing within the period
If you added money partway through, this simple ROI will not describe your experience accurately. For irregular cash flows, internal rate of return is the correct measure.
Frequently asked questions
What is a good ROI?
Only meaningful with a period and a risk level attached. As a reference point, broad stock market returns have often run somewhere around seven to ten percent a year nominal over long horizons.
What is the difference between ROI and CAGR?
ROI is the total return across the whole period. CAGR converts that into an annual rate. For anything held longer than a year, CAGR is the more useful comparison.
Should ROI include taxes?
For a true picture of what you kept, yes. Use after-tax proceeds in the returned figure if you want the number that reflects your actual outcome.
Can ROI be negative?
Yes, whenever you get back less than you put in. The annualised figure then shows the annual rate of loss.