General
ROI Calculator
Calculate total return on investment and annualized ROI for any asset — stocks, property, a business, or a side project — from cost, income, and final value.
Estimated total ROI
35.85%
$9,500 net profit over 3 years
Annualized ROI
10.75%
Return multiple
1.36×
Total cost
$26,500
Over 3 years, this investment returned a total ROI of 35.85% — equivalent to an annualized return of 10.75% per year.
Total ROI reflects the full holding period at once; annualized return restates it as a constant yearly rate, which is what makes returns over different holding periods comparable.
Value implied by a constant annualized return
This is the smooth path implied by holding the annualized return constant every year, not the actual year-by-year path.
Your numbers
Fees, repairs, taxes — anything else you put in.
Dividends, rent, interest, coupons.
+Advanced options
Adds a real (inflation-adjusted) annualized return figure below. Optional.
The formula
ROI = (Net Profit ÷ Total Cost) × 100
Net profit is total return (final value plus any income received) minus total cost (initial investment plus additional costs). Annualized ROI converts the total return multiple into a compound annual rate: (Total Return Multiple)^(1 ÷ years) − 1.
When an inflation rate is set, the real annualized return applies the Fisher relation to that annualized figure — it doesn't change total ROI or net profit, which stay in nominal terms.
How to read it
Return on investment is the most general-purpose metric in finance: net profit divided by what it cost to earn it. Its strength is also its limitation — it works for almost any asset, but on its own it says nothing about how long that return took to materialize.
A 30% ROI sounds identical whether it happened in six months or six years, which is why annualized ROI (or CAGR — compound annual growth rate) matters so much for comparing investments with different holding periods. Six months to 30% is an extraordinary result; six years to reach the same 30% is a modest, single-digit annual return.
Remember to include everything the investment returned — not just its final sale value. Dividends, rental income, and interest payments received along the way are part of the real return and belong in the numerator alongside any change in price.
Frequently asked
What counts as a good ROI?+
It depends entirely on the asset class, risk, and time horizon — a 15% ROI over one month is exceptional, while the same 15% over ten years is mediocre. That's why annualized ROI, which normalizes for holding period, is usually the more useful figure for comparing different investments.
What's the difference between ROI and annualized ROI?+
Total ROI measures the full return over the entire holding period, however long that was. Annualized ROI (also called CAGR) converts that into an equivalent compound annual growth rate, which is essential for comparing a 2-year investment against a 10-year one on equal terms.
Should I include income like dividends or rent in ROI?+
Yes — total ROI should capture everything the investment returned, not just the price change. This calculator has a dedicated field for income received along the way (dividends, rent, coupons) so it's included in the total return alongside the final value.
Does ROI account for risk or inflation?+
It doesn't adjust for risk — two investments with identical ROI can carry very different risk, and this calculator has no way to know that. Inflation is available as an optional advanced assumption: turn it on to see the annualized return restated in today's purchasing power, alongside — never in place of — the nominal figure.
What is 'real annualized return'?+
It's the annualized return adjusted for an assumed inflation rate, using the Fisher relation: (1 + real) = (1 + nominal) / (1 + inflation). It answers 'how much did my purchasing power actually grow,' as opposed to the nominal figure, which only measures amounts of money. It's an estimate based on the inflation rate you assume, not a prediction of actual future inflation.
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Educational tool, not advice. This calculator illustrates a standard formula using the numbers you enter. It does not account for your full financial picture, taxes, or local market conditions, and it is not a recommendation to buy, sell, or hold any asset. Speak with a licensed professional before making investment decisions.