Investment ROI Calculator
Standard ROI formula ยท By Stuart Mathieson · Updated October 2026
Optional
Optional, for annualized ROI
Results
Net Profit
ROI
Annualized ROI
Results are estimates for illustration only and are not financial advice. Consult a qualified financial professional before making financial decisions.
How the ROI calculator works
If you enter how many years you held the investment, the calculator also finds the annualized ROI: the steady yearly return that would turn your total cost into your final value over that time. It is also known as the compound annual growth rate (CAGR).
Worked example
$10,000 invested with $200 of fees, sold for $15,000 after 4 years:
- Total cost = $10,000 + $200 = $10,200.
- Net profit = $15,000 − $10,200 = $4,800.
- ROI = $4,800 ÷ $10,200 × 100 = 47.06%.
- Annualized ROI = 1.47061/4 − 1 = 10.12% a year.
Why annualized ROI matters
The same total ROI means very different things over different lengths of time. A 50% total return works out to:
| Held for | Annualized return |
|---|---|
| 1 year | 50.00% |
| 2 years | 22.47% |
| 5 years | 8.45% |
| 10 years | 4.14% |
Annualized figures let you compare an investment fairly with others held for different lengths of time, or with a savings rate. To compare several investments at once, use the ROI Comparison Calculator.
Things to keep in mind
- Timing of cash flows. ROI only looks at the start and the end. If you added money or received dividends or rent along the way, a method that accounts for timing - such as the internal rate of return (IRR) - gives a fairer picture.
- Include every cost. Fees, commissions, taxes on the sale, repairs and maintenance all reduce your real return.
- Risk isn't shown. Two investments with the same ROI can carry very different risks.
- Inflation. A 4% annual return during 3% inflation is only about 1% a year in real terms - the Inflation Impact Calculator shows the effect over time.
Frequently asked questions
What counts as "additional costs"?
Anything on top of the purchase price that reduces your real profit - brokerage fees, commissions, closing costs, or similar expenses.
What's the difference between ROI and annualized ROI?
ROI is your total return over the whole holding period. Annualized ROI converts that into an average yearly rate, which makes it possible to compare a 2-year investment fairly against a 10-year one.
Can ROI be negative?
Yes - a negative ROI simply means the final value (after costs) was lower than what you put in.
What is CAGR?
CAGR, the compound annual growth rate, is the constant yearly rate that would take an investment from its starting value to its ending value over a period. It is what this calculator shows as annualized ROI.