ROI Calculator
Calculate return on investment as a percentage and, with a holding period, the annualised return. Works for any investment with a known cost and value.
Enter the amount invested and the final value, then press Calculate ROI.
What the ROI calculator does
Return on investment (ROI) compares what you gained with what you put in. This calculator takes the amount you invested, the value it has now or at the end of your holding period, and optionally the number of years you held it. It reports the total ROI as a percentage and, when you supply a holding period, the annualised rate that would produce the same total growth each year.
The tool performs arithmetic on the numbers you give it. It does not look up prices, and it cannot tell whether a value includes dividends, fees or taxes. The result is only as accurate as the inputs, so use the same basis for both figures.
How to use it
- Enter the amount invested, which is the total cost of the position. It must be greater than zero. Include purchase fees if you want them counted.
- Enter the final value, meaning the current or sale value. It cannot be negative.
- Optionally enter the years held. This can be a decimal, so 1.5 means eighteen months.
- Press Calculate ROI. The total ROI and net gain always appear. The annualised rate appears only when you enter a holding period.
Worked example
You invest 5,000, and after three years the position is worth 7,250. The net gain is 2,250. The total ROI is 2,250 divided by 5,000, which is 0.45, or 45%.
For the annualised figure, take the ratio of final value to amount invested, which is 1.45, and raise it to the power of one divided by three years. That gives about 1.1319, so the annualised return is about 13.19% per year. As a check, 5,000 compounded at 13.19% for three years is 5,000 × 1.1319³, which returns about 7,250.
Tips and limits
- Total ROI ignores time. A 45% gain over one year and a 45% gain over ten years are very different results, which is why the annualised figure is useful when you know the holding period.
- Use one currency throughout, and apply the same definition of cost each time. If fees are part of the cost in one comparison, include them in every comparison.
- A final value of zero produces a loss of 100%. A negative result means the position is worth less than you paid.
- Unrealised gains are estimates until you sell. Transaction costs and taxes on exit can reduce what you actually keep.
ROI Calculator – Frequently Asked Questions
What is the formula for ROI?
ROI = (final value − amount invested) ÷ amount invested × 100. An amount invested of 5,000 that is now worth 7,250 has a total ROI of 45%.
What is annualised ROI?
Annualised ROI is the constant yearly rate that would turn the amount invested into the final value over the holding period. It equals (final value ÷ amount invested) raised to the power of 1 ÷ years, minus 1, multiplied by 100.
Can ROI be negative?
Yes. When the final value is below the amount invested, ROI is negative. A final value of zero gives an ROI of minus 100%.
Can I enter a part-year holding period?
Yes. Decimal years are accepted, so 0.5 means six months and 1.5 means eighteen months. The annualised figure uses the exact number you enter.
Does ROI account for inflation?
No. ROI is a nominal figure. To compare it with inflation, you can subtract the inflation rate for the same period from the annualised return, which gives a rough real return.