ROI Calculator
↻ Updated 2026Enter the amount invested and the amount returned to get your return on investment. Add a holding period to see the annualized rate.
Educational calculators — always consult a licensed professional before making financial decisions.
Runs entirely in your browser — nothing you enter is sent to us.How this works
How to read your ROI
50% sounds like a verdict and isn't one. ROI has no clock in it: the same $10,000 → $15,000 is 50% whether it took three years or thirty. The annualized figure — 14.47% here — is the one you can compare against anything else, and it's the one the headline number hides.
How return on investment and annualized ROI are worked out
ROI is the simplest measure in finance: what you got back, minus what you put in, as a share of what you put in. Its simplicity is the whole reason it travels — you can apply it to a stock, a rental property, a machine or a marketing campaign, and the arithmetic doesn't change.
That simplicity is also its defect, because nothing in the formula knows about time. Annualized ROI fixes that by asking what constant yearly rate would have produced the same result — the same geometric mean that CAGR uses, applied to the same two numbers.
net profit = amount returned − amount invested ROI = net profit ÷ amount invested annualized ROI = (amount returned ÷ amount invested) ^ (1 ÷ years) − 1 return multiple = amount returned ÷ amount invested
- amount invested
- Everything you put in, including costs — commissions, closing costs and fees belong here — leaving them out is the most common way to overstate ROI
- amount returned
- Everything you got back — sale proceeds plus any income received along the way (dividends, rent), after selling costs
- net profit
- The gain in dollars — $5,000 on the defaults; negative if the investment lost money, which gives a negative ROI
- years
- The holding period — optional on this page — toggle it off and you get total ROI and a return multiple only
- return multiple
- Amount returned ÷ amount invested — 1.50× on the defaults; a 100% ROI is a 2× multiple, which is why the two conventions confuse people
The relationship between the two numbers is not intuitive, and it's worth internalising. ROI and annualized ROI aren't a rescaling of each other by the number of years — you can't divide 50% by 3 to get 16.67%, because that ignores compounding. The real answer is 14.47%, and the gap grows as periods lengthen: over 10 years, the naive division gives 5% while the true annualized figure is 4.14%.
The other thing to watch is what 'amount returned' includes. For a stock held three years, it's the sale price plus dividends received. For a rental, it's the sale price plus cumulative net rent minus every cost of owning. ROI's flexibility means two people can compute wildly different ROIs on the same asset by drawing the boundary in different places — which is exactly why it's the favoured metric in a pitch deck. See the dividend reinvestment calculator for how income complicates the ending value.
Worked examples
Example: $10,000 invested, $15,000 returned after 3 years
The calculator's defaults. One purchase, one sale, three years apart, with nothing added in between.
| Amount invested | $10,000 |
| Amount returned | $15,000 |
| Net profit$15,000 − $10,000 | $5,000 |
| Total ROI$5,000 ÷ $10,000 | 50% |
| Return multiplenot 50% of the multiple — a 2× is a 100% ROI | 1.50× |
| Annualized ROI1.50 ^ (1/3) − 1 | 14.47% |
| Naive 50% ÷ 3wrong — ignores compounding | 16.67% |
14.47% a year, not 16.67%. The difference is compounding: 14.47% earned on a growing base three times over produces exactly $15,000, whereas 16.67% a year would produce $15,880. As a verdict, 14.47% is a good result — it comfortably clears the S&P 500's ~10% long-run nominal average. The 50% headline told you none of that.
Example: the identical $5,000 profit, held for 10 years instead
Same money in, same money out. Drag the holding period from 3 years to 10 and watch which numbers move and which don't.
| Total ROIunchanged | 50% |
| Net profitunchanged | $5,000 |
| Return multipleunchanged | 1.50× |
| Annualized ROI over 3 years | 14.47% |
| Annualized ROI over 10 years1.50 ^ (1/10) − 1 | 4.14% |
| Annualized ROI over 1 yearthe only case where the two agree | 50% |
Three of the four headline numbers are frozen while the investment goes from excellent to poor. 4.14% a year over a decade would have lost to an index fund by a wide margin and barely outpaced 3% inflation. Everything that distinguishes those two outcomes lives in a field the calculator lets you switch off — which is the strongest argument for never quoting an ROI without its period.
Frequently asked questions
What is a good ROI?
Unanswerable without a time period attached, which is the honest response to the question as usually asked. A 50% ROI is superb over one year and mediocre over ten. Once annualized, the standard US benchmark is the S&P 500's roughly 10% long-run nominal average (about 7% after inflation) — beat that over a long period and you did well.
The benchmark also has to match the risk. Commonly cited reference points: around 4-6% for bonds, roughly 10% or more for real estate deals, and double digits expected from anything venture-shaped precisely because most of those investments return nothing at all. An ROI that beats the index while taking three times the risk isn't obviously a better result — it's a different bet that happened to pay.
What's the difference between ROI and annualized ROI?
ROI measures how much; annualized ROI measures how fast. ROI is a total over the whole holding period with no notion of time, so it can't be compared across investments of different lengths. Annualized ROI converts it to a per-year compound rate, which can.
The conversion isn't division. 50% over 3 years is 14.47% a year, not 16.67% — dividing ignores that year 2 earns on year 1's gains. The gap widens with the period: over 10 years, dividing gives 5% and the truth is 4.14%. Annualized ROI on this page is computed identically to CAGR; for a single sum in and out, the two terms mean the same thing.
Does ROI include dividends?
Only if you put them in the 'amount returned' field. The calculator has no idea what your investment was — it's arithmetic on two numbers you supply.
For a stock, the correct ending amount is what you sold for plus every dividend you received. Omit them and you've computed a price-only return, which materially understates a dividend payer: roughly 40% of the S&P 500's total return since 1926 came from reinvested dividends. Same for a rental — the return is the sale price plus cumulative net rent, and the amount invested is the purchase price plus closing costs and every capital improvement.
Does ROI account for taxes?
No. The figure here is gross, and in the US the tax on a $5,000 gain depends almost entirely on one date.
Hold an asset more than a year and the gain is long-term, taxed at 0%, 15% or 20% — the 15% rate starts above $49,450 of taxable income for single filers in 2026 and $98,900 for married filing jointly. Sell at eleven months and it's short-term, taxed as ordinary income at rates up to 37%. Above $200,000 (single) or $250,000 (married filing jointly), add the 3.8% net investment income tax. On this page's three-year hold the gain is long-term, so a 15% filer keeps $4,250 of the $5,000 — an after-tax ROI of 42.5%, not 50%. The capital gains tax calculator runs the actual bill.
Can ROI be negative?
Yes — any time the amount returned is below the amount invested. $10,000 in and $7,000 out is a −30% ROI, and this calculator will show it, labelling the result a net loss.
Annualized ROI handles losses too, but it can't handle a total wipeout: an ending value of zero has no compound rate that reaches it, because no percentage loss short of −100% in a single step gets you there. The calculator returns 0% when the amount invested is zero, so a 0% reading on this page can mean either genuinely flat or an input the formula can't process.
What ROI can't see
ROI's appeal is that it works on anything. That's also why it's the easiest metric in finance to quote misleadingly — usually without anyone intending to.
- Time, unless you add it — The core formula has no period in it. The holding-period toggle on this page can be switched off entirely, which produces a number that literally cannot be compared to any other investment. A 50% ROI with no period attached is not information.
- The timing of cash flows — One sum in, one sum out. Real investments dribble money in and out — additional purchases, dividends, rent, a capital call. A dollar returned in year 1 is worth more than a dollar returned in year 3, and ROI treats them identically. IRR is the measure that doesn't; this page doesn't compute it.
- Risk — A 50% ROI from Treasuries and a 50% ROI from a single biotech are the same number describing incomparable decisions. Nothing on this page distinguishes a sure thing from a coin flip that landed well.
- Tax and fees, unless you net them out — Both fields are whatever you type. Commissions belong in the amount invested; tax and selling costs come off the amount returned. Most quoted ROIs quietly skip both, which is worth remembering when you're reading someone else's.
- Inflation — 14.47% nominal with 3% inflation is an 11.14% real annualized return. Over a three-year hold that's a modest adjustment; over twenty it's most of the story.
- ·Standard return-on-investment formula
Rates, brackets and limits here are checked against primary sources. If a number still looks off, email support@realmoneyiq.com and we'll review and fix it.
RealMoneyIQ provides free educational calculators, not financial, tax, investment or legal advice. Results are estimates based on the assumptions you enter and publicly published rates; your actual outcome will differ. Always confirm decisions with a licensed professional who knows your full situation.