ROI Calculator

ROI Calculator — What It Does

Enter your initial investment, final value, and holding period to instantly see your total ROI percentage, net profit or loss, annualized return (CAGR), and investment multiple (MOIC). Useful for evaluating stocks, real estate, business projects, marketing campaigns, or any investment where you want to compare performance against a benchmark.

ROI Formulas Reference

• Simple ROI — (Final − Initial) / Initial × 100
• Net Profit — Final Value − Initial Investment
• Annualized ROI (CAGR) — (Final / Initial)^(1/years) − 1
• Investment Multiple — Final / Initial

ROI Examples

• $10,000 invested, grows to $14,000 over 3 years → ROI = 40%, CAGR = 11.87%, 1.4× multiple
• $5,000 marketing spend generates $20,000 revenue → ROI = 300%, 4× multiple
• $200,000 property purchased, sold for $280,000 after 5 years → ROI = 40%, CAGR = 6.96%

Tips for Accurate ROI Analysis

• Include all costs — Fees, taxes, maintenance, and opportunity cost all reduce real ROI.
• Compare annualized figures — Never compare a 2-year ROI to a 10-year ROI without annualizing both.
• Adjust for risk — A higher ROI from a riskier asset is not necessarily better than a lower ROI from a safer one.
• Account for inflation — A 5% ROI in a 4% inflation environment is only 1% real return.

Frequently Asked Questions

What is the ROI formula?

ROI = ((Final Value − Initial Investment) / Initial Investment) × 100. For example, if you invest $1,000 and it grows to $1,500, your ROI is ((1500 − 1000) / 1000) × 100 = 50%.

What is the difference between ROI and annualized ROI?

Simple ROI measures total percentage gain regardless of time. Annualized ROI (CAGR) shows the equivalent yearly return: CAGR = (Final / Initial)^(1/years) − 1. A 50% total ROI over 5 years is only a 8.45% annualized return — very different from 50% per year.

What is considered a good ROI?

It depends on the asset class and time horizon. For stock market investments, an annualized ROI of 7–10% is historically average. For real estate, 8–12% is common. Business investments often target 15–25%+. Short-term trades or marketing campaigns use different benchmarks.

What is an investment multiple (MOIC)?

MOIC (Multiple on Invested Capital) is simply Final Value / Initial Investment. An investment that doubles your money is a 2× MOIC. It is commonly used in private equity and venture capital where time horizons vary widely.

How do I account for recurring costs when calculating ROI?

Add all ongoing costs (fees, maintenance, taxes) to your initial investment figure, or subtract them from your final value. ROI only tells you the net return — all costs must be included for an accurate picture. This is why "total cost of ownership" matters in business ROI analysis.