💰 Financial
ROI Calculator
Calculate your Return on Investment (ROI) and annualized ROI. Determine exactly how much profit or loss an investment generated relative to its cost.
⏳
Formula
ROI = ((Gain from Investment - Cost of Investment) / Cost of Investment) × 100
Annualized ROI = [(1 + ROI/100)^(1/n) - 1] × 100Gain- Final value of the investment plus any income (dividends, rent, etc.)
Cost- Initial amount invested
n- Number of years the investment was held
Example
Real Estate Investment
Buying a property for $200,000, collecting $20,000 in rent over 2 years, and selling it for $230,000.
- Calculate total gain: $230,000 (sale) + $20,000 (rent) = $250,000.
- Calculate total cost: $200,000.
- Calculate simple ROI: (($250,000 - $200,000) / $200,000) × 100 = 25%.
- Calculate annualized ROI (2 years): [(1 + 0.25)^(1/2) - 1] × 100 = 11.8% per year.
Frequently Asked Questions
Simple ROI tells you the total percentage gained over the entire life of the investment. Annualized ROI breaks that gain down into a yearly rate, making it easier to compare investments held for different lengths of time.
Yes. If your total return (final value plus income) is less than your initial cost, your ROI will be a negative percentage, indicating a loss.