ROI Calculator
Calculate total return, net profit, annualized ROI, and multiple on money from an initial investment, final value, and holding period. For example, a $50,000 investment returning $85,000 after 5 years yields a 70% total ROI and an 11.2% annualized return.
Investment Details
Enter your investment amounts and holding period.
Decimals are supported, e.g. 2.5 for two and a half years.
Return Summary
How your investment performed.
Total ROI
+50.00%
+$5,000 net profit
Annualized ROI (CAGR)
+14.47%
Multiple on Money
1.50x
Investment Period
3 years
Initial Investment
$10,000
Final Value
$15,000
A $10,000 investment grew to $15,000 in 3 years - a 50.0% total return (14.47% annualized).
Methodology and limitations
Last reviewed:
Methodology
Calculates net profit, total ROI, annualized ROI, and multiple on money from initial investment, final value, and holding period.
Limitations
Math-only estimate. It does not model fees, taxes, dividends, interim cash flows, reinvestment, volatility, or risk-adjusted return.
Official sources
How to Use the ROI Calculator
Calculate total return, net profit, annualized ROI, and multiple on money from an initial investment, final value, and holding period. For example, a $50,000 investment returning $85,000 after 5 years yields a 70% total ROI and an 11.2% annualized return.
Method used
This calculator compares the starting investment with the final value, then calculates net profit, total ROI, annualized ROI, and multiple on money.
ROI = (final value - initial investment) / initial investment x 100
Practical example
Example: a $10,000 investment that grows to $15,000 over 3 years has a 50% total ROI before fees and taxes.
- $10,000 initial investment
- $15,000 final value
- 3-year holding period
The output shows total ROI, net profit, annualized ROI, and the final value as a multiple of the starting investment.
Assumptions
- The final value is known or estimated by the user.
- The holding period is entered in years or months.
What this includes
- Total return, annualized return, net profit, and multiple on money.
What this excludes
- Cash flows during the holding period, taxes, fees, dividends, reinvestment, and risk-adjusted return.
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Frequently Asked Questions
What is the ROI formula?
Return on investment (ROI) equals net profit divided by initial investment, multiplied by 100 to express as a percentage. Net profit is final value minus initial investment. For example, investing $50,000 and selling for $85,000 produces a $35,000 profit and a 70% ROI. ROI is one of the most widely used metrics for comparing investment performance across different amounts, asset types, and time periods because it normalizes returns relative to what you put in.
What is annualized ROI?
Annualized ROI converts your total return into an equivalent yearly growth rate over the holding period, making it easier to compare investments held for different lengths of time. A 70% total return over 5 years annualizes to roughly 11.2% per year. A 100% return over 10 years annualizes to about 7.2% per year - lower per year despite the higher total return. Always compare annualized figures when evaluating investments with different holding periods.
Does ROI include fees and taxes?
Only if the final value you enter already reflects all fees, commissions, and taxes paid. The calculator does not separately model transaction costs, management fees, capital gains taxes, or inflation. For an accurate ROI on a real estate sale, for example, subtract realtor commissions, closing costs, and capital gains tax from the sale price before entering the final value. Pre-tax and after-tax ROI can differ substantially on large gains.
Can ROI be negative?
Yes. If the final value is less than the initial investment, net profit is negative and ROI is negative - indicating a loss. For example, investing $50,000 and ending with $40,000 produces a -$10,000 profit and a -20% ROI. Negative ROI is common in short-term market downturns, speculative investments, and assets that depreciate. Annualized ROI can also be negative when an investment loses value over the holding period.
What is a good ROI on an investment?
A good ROI depends on the asset class, risk level, and time horizon. U.S. stocks have historically returned about 7% to 10% annually over long periods. Real estate investors often target 8% to 12% annual returns including appreciation and cash flow. A 70% total ROI over 5 years (11.2% annualized) beats the historical stock market average. Compare your annualized ROI against relevant benchmarks rather than raw percentage alone.