ROI Calculator

An ROI calculator divides your net profit by what the investment cost you. Put in $10,000, pay $200 in fees and get back $15,000 four years later: the net profit is $4,800, so ROI = 4,800 ÷ 10,200 × 100 ≈ 47.06%. Spread over four years with compounding, that is an annualized ROI of about 10.12% a year.

How to use the ROI calculator

1. On the ROI tab, type what you invested, what you got back, and any fees or costs. Add income such as dividends, interest or rent if the investment paid you along the way.
2. Enter how long you held it, either in years or as a start and end date.
3. Read the ROI and the annualized ROI at the top, then open Show steps to see the working with your numbers.
4. Use Compare to rank up to three investments, or Target to find how much you need back to reach a return you have in mind.

ROI formula

Return on investment compares what you gained with what you put in:

ROI = (total returned − total cost) ÷ total cost × 100

• Total cost is the amount invested plus fees and other costs: commissions, closing costs, account fees.
• Total returned is what the investment is worth or sold for, plus any income it paid you.
• Net profit is total returned − total cost. A negative net profit means a loss, and the ROI is negative.

ROI is a percent change: the change in your money divided by where it started. It is the same arithmetic as any percentage of a whole.

Annualized ROI and its link to CAGR

A plain ROI ignores time. 47% in four years and 47% in one year are very different results. The annualized ROI is the yearly rate that, compounded, turns the total cost into the total returned:

Annualized ROI = (total returned ÷ total cost)^1/t − 1, where t is the number of years.

This is exactly the compound annual growth rate (CAGR) of your money. In the example, (15,000 ÷ 10,200)^1/4 − 1 = 1.470588^0.25 − 1 ≈ 0.1012, or 10.12% a year. Check it backward: 10,200 × 1.1012⁴ ≈ 15,000.

When you enter dates, the calculator counts the days and divides by 365.25, the average year length including leap years. March 15, 2022 to March 15, 2026 is 1,461 days, which is 4 years.

Why ROI ÷ years is not the yearly return

Dividing 47.06% by 4 gives 11.76% a year, but that simple average is too high. With compounding, each year’s gain is earned on a larger balance, so a smaller rate, 10.12%, is enough to reach the same end value. The gap grows with longer periods and bigger returns. For a one-year holding period the two are equal.

Worked examples

A loss after fees

You buy shares for $2,500, pay $25 in commissions, and sell two years later for $1,800. Total cost = $2,525. Net profit = 1,800 − 2,525 = −$725. ROI = −725 ÷ 2,525 × 100 ≈ −28.71%. Annualized: (1,800 ÷ 2,525)^1/2 − 1 ≈ −15.57% a year.

Income and fees together

A rental property costs $50,000 plus $1,500 in closing costs. Over 6.5 years it pays $4,000 in net rent, and you sell for $62,000. Total cost = $51,500; total returned = 62,000 + 4,000 = $66,000. Net profit = $14,500 and ROI ≈ 28.16%. Annualized: (66,000 ÷ 51,500)^1/6.5 − 1 ≈ 3.89% a year.

Comparing three investments

C has the biggest total ROI and the most dollars, but it took seven years. B grew fastest, 18.33% a year. Annualized ROI is the fair yardstick when holding periods differ.

Total ROI vs. annualized ROI (quick-reference table)

Doubling your money (100% ROI) over 10 years works out to about 7.18% a year.

Finding the return you need

Turn the formula around: amount needed = total cost × (1 + target ROI). To earn 25% on $10,000 you need $12,500 back. If you have 3 years, the yearly rate needed is 1.25^1/3 − 1 ≈ 7.72%. The Target tab does this for any amount, and the investment calculator projects growth with regular contributions.

How fees and costs change ROI

Fees go into the cost, so they lower ROI twice: they reduce your profit and they raise the base you divide by. In the first example, without the $200 fee the ROI would be 5,000 ÷ 10,000 = 50.00%; with it, 47.06%. The SEC’s investor.gov notes that fees “may seem small, but over time they can have a major impact on your investment portfolio”, and its bulletin on performance claims adds that fees and expenses reduce investment returns, so check which ones a quoted return includes.

Common ROI mistakes

• Leaving out costs. Commissions, closing costs, repairs and account fees all belong in the total cost.
• Ignoring time. Compare annualized ROI, not total ROI, when holding periods differ.
• Annualizing very short periods. A 5% gain in one month annualizes to almost 80%, which assumes the same luck 12 months in a row.
• Treating past ROI as a forecast. Investor.gov reminds investors that past performance does not necessarily predict future results.

Results are for learning and planning, not financial advice. Taxes are not included unless you add them to fees.

Sources

Checked November 2026.

• SEC investor.gov, Updated Investor Bulletin: How Fees and Expenses Affect Your Investment Portfolio
• SEC investor.gov, Understanding Fees
• SEC investor.gov, Investor Bulletin: Performance Claims

ROI practice quiz: 10 questions

Test yourself with 10 multiple-choice questions. Choose an answer and press Submit to see if you are right and why. Your score appears at the end.

Frequently asked questions

How do you calculate ROI?

Subtract the total cost from the total returned to get the net profit, divide by the total cost, and multiply by 100. $1,200 profit on a $2,000 cost is 1,200 ÷ 2,000 × 100 = 60%.

What is the difference between ROI and annualized ROI?

ROI is the whole return over the holding period. Annualized ROI is the compound yearly rate that produces it: (total returned ÷ total cost)^1/t − 1. It lets you compare investments held for different lengths of time.

Is annualized ROI the same as CAGR?

Yes, for a single amount invested at the start and a single value at the end. Both are the yearly compound rate that grows the starting amount into the ending amount.

What does a 30% ROI mean?

You got back your cost plus 30% of it. On $1,000 that is $1,300 back, a $300 profit. Over 3 years it is about 9.14% a year.

Can ROI be negative?

Yes. If you get back less than you put in, net profit and ROI are negative. The lowest possible ROI is −100%, when the investment is worth nothing.

Related calculators

• Investment calculator: growth with contributions over time
• Percentage calculator: percent of a number and more
• Percent change calculator: increase and decrease between two values
• Compound interest calculator: how a rate compounds year after year