What is ROI?
Return on Investment (ROI) measures the gain or loss generated on an investment relative to the amount of money invested. It is one of the most commonly used metrics to evaluate the efficiency or profitability of an investment.
ROI Formula
ROI = (Investment Gain / Amount Invested) × 100
Investment Gain = Amount Returned − Amount Invested
Annualized ROI (CAGR)
When you want to compare investments over different time periods, Annualized ROI (also known as Compound Annual Growth Rate or CAGR) is more useful:
Annualized ROI = [(Ending Value / Beginning Value)(1 / years) − 1] × 100
How to Use This Calculator
- Enter the Amount Invested.
- Enter the Amount Returned (final value of the investment).
- Choose how to specify the investment time: Use Dates or Use Length (years + months).
- Click Calculate ROI.
- View the ROI percentage, Annualized ROI, and visual breakdown.
Important Notes
- ROI does not take into account the time value of money unless you use the Annualized ROI feature.
- Always consider risk alongside return when evaluating investments.
- This calculator assumes a single investment and single return for simplicity.