What ROI measures
Return on investment compares what you gained with what you put in: ROI = (amount returned − amount invested) ÷ amount invested. It works for anything with a cost and a payoff: a stock, a rental property, a marketing campaign or new equipment. Count everything: the amount returned should include dividends or rent received and be net of fees, commissions and taxes.
Worked example
You invest $10,000 and three years later it is worth $15,000. The gain is $5,000 and the ROI is 50%. Spread over three years, that is an annualized ROI of 14.47%: the steady yearly rate that grows $10,000 to $15,000 in three years.
If you invested $10,000 and got back $8,000, the ROI is −20%.
ROI vs annualized return
A 50% ROI is excellent over one year and poor over twenty. Always compare annualized figures when investments are held for different lengths of time. For investments with several deposits or withdrawals, use an internal rate of return (IRR).
How this works
ROI is the gain (amount returned minus amount invested) divided by the amount invested, shown as a percentage. If you enter the number of years held, the page also shows the annualized return, (returned ÷ invested)^(1 ÷ years) − 1, which is the compound annual growth rate. Leave years at 0 to hide it. Everything runs in your browser.
Frequently asked
How do I calculate ROI?
(Amount returned − amount invested) ÷ amount invested × 100.
What is a good ROI?
It depends on risk and time. Broad stock markets have historically returned around 7–10% a year before inflation.
What is annualized ROI?
The yearly compound rate that gives the same total ROI over the holding period.
Should I include fees and taxes?
Yes. Subtract them from the amount returned for a true picture.
Sources
Reviewed Oct 17, 2026 · test vectors fixtures/calculators/finance/roi-calculator/