Calculate profit, return on investment and annualized ROI, with fees included.
Quick answer
The profit is $3,500, which is an ROI of 35.0%. Spread over 3 years that is an annualized return of 10.5% a year.
| Final value | Profit | ROI | Annualized over 3 years |
|---|---|---|---|
| $11,000 | $1,000 | 10.0% | 3.2% |
| $12,500 | $2,500 | 25.0% | 7.7% |
| $13,500 | $3,500 | 35.0% | 10.5% |
| $15,000 | $5,000 | 50.0% | 14.5% |
| $20,000 | $10,000 | 100.0% | 26.0% |
These figures are computed with the same formulas as the ROI Calculator above. Change the inputs in the tool to see your own result.
The ROI Calculator measures return on investment: profit as a percentage of what you put in. Enter the amount invested and the final value, add any fees, and optionally the length of the investment to get the annualized ROI, which lets you compare investments of different lengths fairly. Results include the profit or loss, ROI percentage and return multiple, with the formula shown.
Made for everyone. Typical uses:
You invest $1,000 and it is worth $1,500 two years later. Profit is $500 and ROI is 50%, a 1.5x multiple. Because it took two years, the annualized ROI is 22.47% per year, a fairer figure to compare with a one-year investment that returned 20%.
ROI ignores risk, taxes and the time value of money unless you use the annualized figure, and it says nothing about cash flows along the way. Two investments with the same ROI are not equally good if one was riskier or took much longer.
Accuracy: Formulas follow standard published methods and are checked against worked reference examples. Results are estimates based on the values you enter and do not replace advice from a qualified professional.
Expert Tip
When comparing two investments, look at the multiplier alongside the ROI percentage — a small investment with a high ROI% can still return fewer absolute dollars than a larger one with a lower ROI%, so decide which matters more for your goal before choosing.
Return on investment measures how much profit you made compared with what you put in: ROI = (final value − cost) ÷ cost × 100. If you invest $1,000 and it becomes $1,500, the profit is $500 and the ROI is 50 percent. It is the simplest way to compare an investment, a marketing campaign, a renovation or a piece of equipment on a common scale.
Because ROI is a ratio, it removes the size of the investment from the comparison. A $200 project that returns $300 and a $20,000 project that returns $30,000 both have an ROI of 50 percent. Whether they are equally good depends on the risk, the time and what else you could have done with the money.
A 50 percent return sounds impressive, but a return over ten years is not the same as one over one year. Annualized ROI converts the total return into a steady yearly rate: (final ÷ cost)^(1 ÷ years) − 1. A 50 percent gain over two years is 22.47 percent a year. A 30 percent gain on $20,000 that took three years is only 9.14 percent a year, which may be less attractive than a savings account with less risk.
Whenever two investments have different lengths, enter the number of years and compare the annualized figures. The calculator shows both so you never confuse a long, slow gain with a quick one.
ROI is only as honest as the costs you enter. Add transaction fees, commissions, taxes you have to pay, maintenance and the value of your own time if it is significant. A rental property that returns $26,000 on $20,000 looks like a 30 percent gain until you subtract agent fees and repairs. The calculator has a fee field so costs reduce the return.
For businesses, marketing ROI should include the ad spend, the agency or freelancer, the creative work and any tools bought for the campaign. If an ad campaign cost $5,000 and generated $8,000 of profit-relevant revenue, the profit is $3,000 and the ROI is 60 percent. Use profit, not revenue, on the returned side wherever you can.
There is no universal good ROI. It depends on the risk taken, the time and the alternatives. Broad US stock market returns have averaged roughly 10 percent a year before inflation, or about 7 percent after it, but with large swings from year to year. A safe savings product pays less with much lower risk. A project that returns 15 percent a year but could lose everything is not comparable with a bank deposit.
These related measures answer different questions. ROI is total gain relative to cost. CAGR is the steady yearly growth rate between a start and end value, and it is the same as annualized ROI when there are no interim cash flows. Profit margin measures profit as a share of revenue. If you want to see how a return builds up with regular deposits, use the Compound Interest Calculator, and use the Break-Even Calculator to find the sales needed to recover an investment in a business.
The article how to calculate ROI works through examples for stocks, property and marketing.
ROI ignores risk, so a lucky bet and a well-founded investment can show the same number. It ignores the timing of cash flows unless you annualize, and it treats gains and losses symmetrically, although a 50 percent loss needs a 100 percent gain to recover. It is a starting point for comparison, not a full analysis, and nothing here is financial advice. The calculation runs in your browser and nothing you enter is stored or sent.
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