ROI Calculator — Return on Investment

ROI = (Final Value − Initial Cost) / Initial Cost × 100. Example: invest $10,000, sell for $13,000 → ROI = ($13,000 − $10,000) / $10,000 × 100 = 30%. A positive ROI means profit; negative means loss. ROI does not factor in time by itself — a 30% ROI over 1 year is much better than 30% over 10 years.

Annualized ROI (also called CAGR — Compound Annual Growth Rate) shows the equivalent yearly return: ((Final Value / Initial Cost)^(1/years) − 1) × 100. Example: $10,000 grows to $13,000 over 4 years → CAGR = (1.30^0.25 − 1) × 100 = 6.78% per year. CAGR lets you compare a 5-year investment directly with a 2-year one — total ROI percentages are not comparable across different time periods.

General benchmarks: US stock market (S&P 500) averages 10% annually; developed-market stocks 7-8%; bonds 3-5%; real estate 8-12% (varies heavily by location); savings accounts 1-5% (varies with interest rate environment); startup investments can be −100% to 10×+. Higher expected ROI always comes with higher risk. Adjust your benchmark based on your investment type and time horizon.

ROI is a simple ratio comparing end value to cost. IRR (Internal Rate of Return) accounts for the timing and size of multiple cash flows over time. For a single investment with one entry and one exit, ROI and IRR give equivalent information. IRR is more relevant for business projects with recurring cash flows (e.g., rental property with monthly rent). The calculator computes ROI and CAGR.

To calculate true net ROI, subtract all costs from the final value before calculating. Trading fees, management fees, and capital gains tax all reduce actual returns. Example: invest $10,000, receive $13,000, but pay $300 in brokerage fees and $900 in capital gains tax → net final value = $11,800 → net ROI = 18%, not 30%. Always use net figures for accurate investment comparison.