ROI Calculator
This ROI calculator helps you measure return on investment by comparing the cost of an investment to its gain or loss. It is useful for evaluating business decisions, marketing spend, rental properties, and personal investments.
Investment Details
Return on Investment
Enter investment and gain to calculate ROI.
What Is Return on Investment (ROI)?
Return on Investment (ROI) is one of the most widely used financial metrics for evaluating the efficiency of an investment. It tells you how much profit (or loss) you made relative to the amount you invested. A positive ROI means you earned more than you spent; a negative ROI means you lost money.
The formula is straightforward: ROI = (Net Profit ÷ Cost of Investment) × 100. For example, if you invested $5,000 and received $6,500 back, your net profit is $1,500 and your ROI is (1,500 / 5,000) × 100 = 30%.
What Is a Good ROI?
A "good" ROI depends on the context, time horizon, and risk involved. As a rough benchmark:
- The US stock market (S&P 500) has historically averaged about 10% annual ROI before inflation.
- Real estate investments typically target 8–12% annual ROI.
- Marketing campaigns often aim for an ROI of 5:1 (500%) or higher.
- A savings account currently offers 4–5% ROI with essentially zero risk.
Higher potential returns almost always come with higher risk — always compare investments on a risk-adjusted basis.
How to Use This Calculator
- Enter the initial investment amount (what you paid or spent).
- Enter the final value (what you received or what the investment is now worth).
- Click Calculate to see the net profit, total return, and ROI percentage.
Frequently Asked Questions
What is the difference between ROI and annualized ROI?
A simple ROI calculation doesn't account for time. An ROI of 50% over 10 years is much less impressive than 50% over 1 year. Annualized ROI (also called CAGR — Compound Annual Growth Rate) normalizes returns to a yearly figure so you can compare investments held for different lengths of time.
Does ROI account for inflation?
Standard ROI is a nominal measure — it does not account for inflation. To find your real return, subtract the inflation rate from your ROI. If your investment returned 8% but inflation was 3%, your real return was approximately 5%.
Can ROI be used to compare different types of investments?
Yes, which is why ROI is so popular — it normalizes returns to a percentage, making it easy to compare a real estate investment to a stock portfolio or a business expenditure. Just remember to also compare risk levels and holding periods for a fair comparison.