Reviewed November 2026 · Estimate only, not financial advice.
ROI is the simplest way to judge an investment: what came back, compared with what went in. Enter the amount invested, the amount returned and how long the money was in, and get the ROI, the total gain and the annualized rate.
How This ROI Calculator Works
ROI compares the profit to the cost: (amount returned − amount invested) ÷ amount invested, as a percentage. The annualized ROI converts that into a yearly rate, so a 50% gain over 3 years can be compared with a 50% gain over 10 years — very different achievements.
ROI = (Returned − Invested) ÷ Invested × 100
Annualized ROI = (Returned ÷ Invested)1 ÷ years − 1. Total gain = Returned − Invested.
Worked example: Invest $5,000, get back $7,500 after 3 years. Total gain = $2,500. ROI = $2,500 ÷ $5,000 = 50.00%. Annualized ROI = (7,500 ÷ 5,000)1÷3 − 1 = 14.47% per year.
Practical tips
Always annualize before comparing.A 50% ROI over 3 years (14.47% a year) beats a 50% ROI over 10 years (4.14% a year). The raw percentage without a time frame is meaningless.
Include every cost.Fees, taxes and transaction costs are part of the amount invested. Leaving them out inflates the ROI — add them to the invested figure.
ROI ignores risk and timing.Two investments can share the same ROI while one was a wild ride and the other a straight line, or while one tied up your money for a decade and the other for a month. Use it alongside risk and time measures.
A negative ROI is a loss.If the amount returned is below the amount invested, ROI is negative. The annualized figure shows how fast the money shrank each year.
Frequently Asked Questions
What is ROI?
Return on Investment — the profit from an investment divided by its cost, as a percentage. It answers: for every $100 I put in, how much did I get back above my stake?
What is a good ROI?
It depends on the asset and the risk. A diversified stock investment has averaged roughly 7–10% a year; a savings account returns 4–5%. Anything above the risk-free rate has to be weighed against the risk taken.
How is annualized ROI different from ROI?
ROI is the total return over the whole holding period. Annualized ROI converts it to a per-year rate, so investments held for different lengths can be compared fairly.
Does ROI include dividends or rent?
Only if you include them in the amount returned. For a stock, add dividends received to the sale proceeds; for a rental, add the net rent collected.
Can ROI be over 100%?
Yes — if you more than double your money, ROI exceeds 100%. A $5,000 investment returned as $12,000 is a 140% ROI.
Is this financial advice?
No. This is a planning estimate only, not financial advice.
