Finance
ROI Calculator
Find your return on investment from what you put in and what came back — net profit, ROI percentage, the multiple of your stake, and annualized ROI (CAGR) when you add a holding period. Updates as you type.
Your investment
ROI = (gain − cost) ÷ costTotal cost, including any fees
$
Final value or total received back
$
Optional — unlocks annualized ROI (CAGR)
⏱years
Return on investment
20%
Modest gain
LossBreak-evenGain
$1,000.00 → $1,200.00 = $200.00 profit
Net profit
$200.00
Multiple
1.2×
Annualized
6.27%/yr
Annualized smooths the 20% total over 3 years of compounding.
Try an example
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The basics
What is return on investment?
ROI turns a profit into a rate. Instead of saying “I made $200,” it says “I made 20% on what I risked” — which lets you compare a small bet against a large one on the same footing. It rests on two simple quantities.
net profit = returned − cost
The net profit
What you actually gained: the amount that came back minus everything you put in. It is negative whenever returned falls short of cost.
$1,200 − $1,000 = $200
ROI = (returned − cost) ÷ cost × 100
The return as a percent
The profit measured against the cost, scaled to a percentage. This is the figure that travels — comparable across any investment, large or small.
($200 ÷ $1,000) × 100 = 20%
Method
How to calculate ROI by hand
Three steps take you from two dollar amounts to a clean percentage.
- 1
Find the net profit
Subtract the total cost from the amount returned. Include fees in the cost so the number is honest.
returned − cost = net profit - 2
Divide by the cost
Divide the net profit by the original cost. This gives the return as a decimal fraction of what you risked.
net profit ÷ cost - 3
Multiply by 100
Turn the fraction into a percentage. A positive result is a gain; a negative result is a loss.
(net profit ÷ cost) × 100 = ROI%
Worked examples
See it across real scenarios
The same formula handles a stock trade, a property flip, and an ad campaign. Switch tabs to watch the numbers — and the annualized rate — fall out of the same steps.
You buy $1,000 of shares and sell three years later for $1,200.
Net profit $1,200 − $1,000 = $200
ROI ($200 ÷ $1,000) × 100 = 20%
Annualized ($1,200 ÷ $1,000)^(1÷3) − 1 = 6.27%/yr
ROI = 20%· 6.27%/yr
Time matters
Annualized ROI & CAGR
Plain ROI is blind to time. Annualized ROI fixes that by asking what steady yearly rate would compound to the same total — the only fair way to compare deals of different lengths.
CAGR = (returned ÷ cost)^(1 ÷ years) − 1
The annualized formula
Take the growth multiple, raise it to one over the number of years, then subtract one. The result is the compound annual growth rate.
(1,200 ÷ 1,000)^(1÷3) − 1 ≈ 6.27%/yr
same total, different speed
Why it changes the verdict
Two investments can share a headline ROI yet rank completely differently once you account for how long each took to get there. The faster one wins.
60% over 2 yrs ≈ 26%/yr beats 60% over 5 yrs ≈ 10%/yr
Quick chart
What return do I need to hit a target ROI?
Set your invested amount and read off the return, profit, and multiple required for each ROI level — from a steep loss to a 5× home run.
Invested amount
$
| Target ROI | Must return | Net profit | Multiple |
|---|---|---|---|
| −50% | $5,000 | −$5,000 | 0.5× |
| −25% | $7,500 | −$2,500 | 0.75× |
| −10% | $9,000 | −$1,000 | 0.9× |
| +0% | $10,000 | +$0 | 1× |
| +10% | $11,000 | +$1,000 | 1.1× |
| +25% | $12,500 | +$2,500 | 1.25× |
| +50% | $15,000 | +$5,000 | 1.5× |
| +100% | $20,000 | +$10,000 | 2× |
| +150% | $25,000 | +$15,000 | 2.5× |
| +200% | $30,000 | +$20,000 | 3× |
| +300% | $40,000 | +$30,000 | 4× |
| +500% | $60,000 | +$50,000 | 6× |
Read it both ways: a positive ROI shows the return and profit you need; a negative ROI shows what a loss of that size leaves you with.
Where it shows up
Where ROI gets used
The same percentage is the common language of investing, business, and marketing decisions.
stocks · funds · crypto
Investing
Compare the payoff of holdings against each other and against a benchmark like the index, independent of how much you put into each.
equipment · hiring · projects
Business
Justify a purchase or initiative by the profit it returns per dollar spent, ranking competing projects by their expected return.
ads · campaigns · channels
Marketing
Measure which campaigns earn their keep. Marketers often quote the cousin metric ROAS — revenue over ad spend — for the same purpose.
Worth knowing
Rules & pitfalls
A handful of habits keep an ROI figure honest and comparable.
include every cost
Count the fees
Commissions, closing costs, and platform fees all belong in the cost. Leaving them out inflates the return.
ROI = 0 at break-even
Break-even is zero
When the amount returned equals the cost, the net profit is nothing and ROI is exactly zero — you neither gained nor lost.
annualize to compare
Match the time frame
Never rank two investments on raw ROI alone if they were held for different lengths. Annualize first, then compare.
risk rides alongside
High ROI, high risk
Outsized returns usually carry outsized risk. A headline ROI says nothing about the chance the bet went the other way.
net vs gross
Net beats gross
Gross ROI ignores costs and taxes; net ROI subtracts them. The net figure is the one that reflects what you actually keep.
ROI ≠ profit margin
Don't confuse it with margin
ROI measures gain against what you invested. Profit margin measures profit against revenue. They answer different questions.
Reference
ROI and its relatives
Several common metrics share ROI’s shape but swap one input. Knowing which is which stops apples being compared to oranges.
profit ÷ equity
ROE — return on equity
Profit measured against the equity you personally put in, ignoring borrowed money. Higher than ROI when leverage is involved.
revenue ÷ ad spend
ROAS — return on ad spend
Revenue divided by advertising cost, usually quoted as a ratio like 4:1. The marketing world’s everyday version of ROI.
annual rate
CAGR — compound annual growth
The steady yearly rate equivalent to a multi-year return. This is what “annualized ROI” means in practice.
cash in ÷ cash out
Payback period
How long until the returns repay the cost. A time figure rather than a percentage, but often read next to ROI.
FAQ
Common questions
ROI measures how much an investment gained or lost relative to its cost, expressed as a percentage. It answers a simple question: for every dollar you put in, how much came back beyond what you spent? A 20% ROI means you ended up with $1.20 for every $1.00 invested.
Subtract the cost from the amount returned to get the net profit, divide that by the cost, then multiply by 100: ROI = (returned − cost) ÷ cost × 100. A $1,000 investment that returns $1,200 gives (1,200 − 1,000) ÷ 1,000 × 100 = 20%.
It depends on the asset, the risk, and the time held, so there is no single magic number. As a rough benchmark, the long-run US stock market has averaged about 7–10% per year. A higher ROI is better, but it almost always comes with more risk — and a negative ROI is a loss.
Basic ROI does not. A 20% return over one month and over ten years look identical as plain ROI. To compare investments held for different periods, use annualized ROI (CAGR), which this calculator shows when you enter a holding period.
Plain ROI is the total percentage gain over the whole holding period. Annualized ROI (CAGR) converts that into an equivalent steady yearly rate, so a 60% total return over three years becomes roughly 17% per year. Annualized figures are what let you compare a two-year deal against a five-year one fairly.
Both. ROI is negative whenever the amount returned is less than the cost — losing half your money is a −50% ROI. It exceeds 100% whenever you more than double your money: turning $1,000 into $3,000 is a +200% ROI, a 3× multiple.
For an honest figure, yes. Add brokerage commissions, closing costs, or platform fees to the amount invested, and subtract taxes from the amount returned. Net ROI after costs is usually a few points lower than the headline number and is the one that reflects what you actually keep.
They share the same shape but different inputs. ROI is profit over total cost. ROE (return on equity) is profit over the equity you put in, ignoring borrowed money. ROAS (return on ad spend) is revenue over advertising cost and is usually written as a ratio like 4:1 rather than a percentage.
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Ugo CharlesBuilt and fact-checked against our editorial standards · Last updated June 2026
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