Return on Investment (ROI) Calculator
Compare gain against cost and view a time-adjusted annualized return.
Investment value breakdown
Gain/loss is shown relative to the original cost.
Detailed Breakdown
Inputs
Investment cost is the amount committed. Amount returned/current value is the ending value being compared. Enter the holding period to calculate an annualized rate.
ROI formula
ROI = (ending value - investment cost) / investment cost * 100%. A positive value is a gain; a negative value means the ending value is below cost.
Annualized comparison
Annualized ROI = ((ending value / cost)^(1 / years) - 1) * 100%. This converts a total return into a compound annual rate so different holding periods are easier to compare.
Limits
This two-value model ignores interim contributions/withdrawals, taxes, fees, and risk. Use consistent costs and cash flows; annualized ROI is not a forecast or a full cash-flow return metric.
Examples
If an investment cost 1,000 and is now worth 1,200, total ROI is 20%. Over a two-year holding period, the equivalent compound annualized return is about 9.54%, before fees and taxes.
FAQ
Can ROI be negative?
Yes. If the ending value is below the entered cost, the total return is negative.
Is annualized ROI the same as total ROI?
No. Total ROI covers the entire holding period. Annualized ROI expresses an equivalent compound yearly rate for comparison.
Does ROI include every cash flow?
This simplified measure compares entered cost and ending value. It does not model dated intermediate cash flows; use a cash-flow method when timing matters.
Related Calculators
- Future Value Calculator — project a value forward.
- Investment Calculator — estimate growth with regular contributions.
- Compound Interest Calculator — compare compounding assumptions.
Internal links: place the ending value in context with the Future Value Calculator or compare contribution scenarios using the Investment Calculator.