ROI Calculator
Calculate return on investment (ROI) from your capital invested and the final amount returned. Get both simple ROI (total return over the holding period) and annualized ROI (equivalent constant yearly rate) for any investment duration.
How It's Calculated
Formula
\text{Simple ROI} = \frac{\text{Final Value} - \text{Initial Investment}}{\text{Initial Investment}} \times 100
\text{Annualized ROI} = \left(\left(\frac{\text{Final Value}}{\text{Initial Investment}}\right)^{\frac{1}{\text{Years}}} - 1\right) \times 100Simple ROI tells you the total percentage return an investment produced over its entire holding period — it doesn't care whether that happened over 6 months or 20 years, it just compares what you put in against what you got back. That makes it useful for a quick gut check, but it's a poor tool for comparing two investments held for different lengths of time: a 50% return over 3 years and a 50% return over 3 months are not equally good, even though Simple ROI reports them identically. Annualized ROI fixes that by answering a more useful question: what constant yearly rate, compounded once a year, would have produced this exact same total return? That single number lets you compare a 3-year investment against a 3-month one, or against a savings account's advertised annual rate, on equal footing. When the duration is exactly 1 year, annualized ROI and simple ROI are mathematically identical — there's only one year to spread the return across, so there's no annualizing left to do. Enter the capital you invested, the final amount you received back (or its current value), and how long you held it, and this calculator returns both figures.
Worked Examples
Standard case: $10,000 invested, $15,000 returned, 3 years
- Simple ROI = (Final − Initial) / Initial × 100 = (15,000 − 10,000) / 10,000 × 100 = 50.00%
- Growth ratio = Final / Initial = 15,000 / 10,000 = 1.5
- Annualized ROI = (1.5)^(1/3) − 1, then × 100 = 14.47%
- Interpretation: a steady 14.47% annual return, compounded for 3 years, produces the same 50% total gain.
Doubling your money: $10,000 invested, $20,000 returned, 2 years
- Simple ROI = (20,000 − 10,000) / 10,000 × 100 = 100.00%
- Growth ratio = 20,000 / 10,000 = 2
- Annualized ROI = (2)^(1/2) − 1, then × 100 = 41.42%
- Interpretation: doubling your money in 2 years is equivalent to a steady 41.42% annual return.
Loss example: $10,000 invested, $8,000 returned, 2 years
- Simple ROI = (8,000 − 10,000) / 10,000 × 100 = -20.00%
- Growth ratio = 8,000 / 10,000 = 0.8
- Annualized ROI = (0.8)^(1/2) − 1, then × 100 = -10.56%
- Interpretation: losing 20% of your capital over 2 years is equivalent to losing a steady 10.56% per year.
Frequently Asked Questions
What if I lost money — how does the calculator handle that?
Enter the final amount you actually received (or the investment's current value) — it can be less than what you invested, or even zero for a total loss. Both Simple ROI and Annualized ROI will be negative, showing you the percentage lost rather than gained. If the final amount is 0, both figures show exactly -100%, since you lost the entire investment regardless of how long you held it.
How is annualized ROI different from simple ROI?
Simple ROI is the total percentage return over the whole time you held the investment, with no adjustment for how long that was. Annualized ROI converts that same total return into an equivalent constant yearly rate, which is what you need to fairly compare investments held for different lengths of time. A 30% simple return over 5 years is a much weaker performance than a 30% simple return over 1 year — annualized ROI makes that difference visible (about 5.4% per year versus 30% per year).
Can the investment duration be less than a year?
Yes. Enter it as a fraction of a year — 6 months is 0.5, 3 months is 0.25, 18 months is 1.5. The annualized ROI formula works the same way regardless of whether the duration is longer or shorter than a year; a strong short-term return often annualizes to a very large yearly rate, since it's projecting that pace out over a full year.
Why do annualized ROI and simple ROI match when duration is exactly 1 year?
The annualized formula raises the growth ratio to the power of 1 divided by the number of years. When years = 1, that exponent is 1/1 = 1, and raising any number to the power of 1 leaves it unchanged — so the annualized calculation reduces to exactly the same arithmetic as the simple ROI calculation. There's nothing to annualize when the holding period already is one year.
Does this calculator account for taxes, fees, or inflation?
No — it computes ROI purely from the capital you enter as invested and the amount you enter as returned. If you want a figure net of trading fees, taxes, or inflation, subtract those costs from the final amount (or adjust it for inflation) before entering it, and the calculator will reflect that net figure.