ROI Calculator (Return on Investment)
Enter what you put in and what you got back. See total ROI, profit, and the annualized return that lets you compare investments of different lengths.
| Profit | — |
| Annualized return (CAGR) | — |
| Investment multiple | — |
The ROI formula
ROI = (Amount returned − Amount invested) ÷ Amount invested × 100
$10,000 growing to $14,000 is a +40% ROI and $4,000 profit. But raw ROI ignores time — a 40% gain over 3 years is very different from 40% over 10. That is what the annualized figure fixes:
CAGR = (Returned ÷ Invested)1/years − 1
The 3-year example annualizes to about 11.9% per year — now comparable to a savings account, an index fund, or any other option.
Common mistakes that inflate ROI
- Forgetting costs: include fees, taxes, maintenance, and your time in "amount invested". A rental property ROI without repair costs is fiction.
- Comparing different time frames with raw ROI: always annualize before comparing.
- Ignoring risk: a 12% expected ROI with high variance is not automatically better than a safe 7%.
Frequently asked questions
How do I calculate ROI?
Subtract the amount invested from the amount returned, divide by the amount invested, and multiply by 100. $10,000 → $14,000 is (14000 − 10000) ÷ 10000 × 100 = +40%.
What is a good ROI?
Context decides. The US stock market averages ~10% per year (about 7% after inflation), so a long-run annualized ROI above that beats the passive benchmark. For business projects, many require 15–25%+ to justify the risk.
What is the difference between ROI and CAGR?
ROI is the total percentage gain over the whole period; CAGR is the equivalent smooth yearly rate. 40% ROI over 3 years equals about 11.9% CAGR.
Can ROI be negative?
Yes — when the amount returned is less than invested. Getting $8,000 back from $10,000 is a −20% ROI.
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Last updated: 2026-07-08