ROI Calculator
Calculate return on investment as a percentage and the annualized return (CAGR) for any investment, project or purchase.
The ROI formula
Return on investment compares what you gained with what you put in. It is the most common way to compare investments, marketing campaigns and business projects.
ROI = (Final value − Initial cost) ÷ Initial cost × 100
ROI ignores time, so a 45% return over three years and a 45% return over ten years look the same. To compare investments of different lengths, use the annualized return, also called the compound annual growth rate (CAGR):
CAGR = (Final ÷ Initial)^(1 ÷ years) − 1
Example
You invest $10,000 and three years later it is worth $14,500. ROI = (14,500 − 10,000) ÷ 10,000 = 45%. The annualized return is (1.45)^(1/3) − 1 = 13.2% a year.
Getting an honest ROI
- Include every cost: purchase fees, commissions, maintenance, taxes and your time if it matters.
- Include all returns: dividends, rent or interest received along the way, not only the sale price.
- Compare against a benchmark. A 6% annual return looks good until you notice an index fund earned 10% over the same period.
Frequently asked questions
What is a good ROI?
It depends on risk and time. Broad stock market index funds have returned around 7–10% a year over the long run, so many investors use that as a baseline.
What is the difference between ROI and CAGR?
ROI is the total percentage gain over the whole period. CAGR spreads that gain into an equivalent yearly rate, which lets you compare investments held for different lengths of time.
Can ROI be negative?
Yes. If the final value is less than what you invested, ROI is negative and shows the percentage you lost.
Last reviewed Oct 20, 2026. Results are estimates; check important decisions with a qualified professional.