Free ROI calculator. Calculate return on investment and annualized return (CAGR) from an initial investment to a final value, including fees.
ROI (Return on Investment) measures the percentage gain or loss on an investment: ROI% = (Final Value - Initial Investment) / Initial Investment x 100. When a holding period is given, this calculator also computes the annualized return (CAGR), which shows the yearly growth rate needed to turn the initial investment into the final value.
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ROI Calculator
Return on Investment (ROI) is the most widely used measure of investment performance: it expresses the gain or loss on an investment as a percentage of the amount originally invested. A higher ROI means a more profitable investment relative to its cost.
Annualized Return
Total ROI alone doesn't account for how long the money was invested. A 50% return over 1 year is a very different result from a 50% return over 20 years. CAGR (Compound Annual Growth Rate) solves this by expressing the return as a constant yearly growth rate.
The formula is: CAGR = (Final Value / Initial Investment)^(1/years) - 1. For example, doubling your money in 10 years is a 100% total ROI, but only about a 7.2% CAGR ā useful context when comparing it to other investment options with different time horizons.
Common Mistake
A common mistake when calculating ROI is ignoring transaction costs, fund fees, or commissions. These directly reduce your net profit and should be subtracted from the final value before calculating ROI ā otherwise the result overstates your actual return.
Related Calculators
For related financial calculations, see our compound interest calculator, SIP calculator, and retirement calculator.
Practical Use Cases
Comparing investment options
Using CAGR to compare returns across investments held for different time periods.
Evaluating a past investment
Checking the actual return on a stock, property, or business investment after selling.
Real estate flips
Calculating profit margin after renovation costs, fees, and holding period on a property sale.
Business investment decisions
Assessing whether a capital expenditure delivered an acceptable return.
Portfolio performance review
Tracking annualized performance of a portfolio over multi-year periods.
ROI% = (Final Value - Initial Investment) / Initial Investment x 100. For example, investing $10,000 that grows to $15,000 gives a $5,000 profit and a 50% ROI.
CAGR (Compound Annual Growth Rate) is the annualized version of ROI ā the constant yearly growth rate that would take the initial investment to the final value over the holding period. Total ROI shows overall gain regardless of time; CAGR lets you compare investments held for different lengths of time on equal footing.
CAGR spreads the total return over the number of years held. A 50% total ROI over 5 years is only about 8.4% annualized ā much lower than 50%, because compounding growth over multiple years reaches 50% total with a smaller yearly rate.
Yes, for an accurate picture. Trading commissions, fund management fees, and transaction costs all reduce your actual net profit. This calculator lets you enter fees separately so they're subtracted from the final value before computing ROI.
Yes. A negative ROI means the final value is lower than the initial investment ā you lost money on the investment. For example, $10,000 that drops to $8,000 is a -20% ROI.