Free Online ROI Calculator
Measure return on investment and annualized performance.
Annualized ROI smooths the total return over time, which makes investments with different holding periods comparable. It assumes all gains are reinvested and ignores taxes and fees.
About the ROI Calculator
Return on investment (ROI) measures how much an investment gained or lost relative to what it cost. It is one of the simplest performance measures because it needs only two numbers: the amount invested and the value at the end. This calculator also annualizes the result, so a three-month flip and a ten-year holding can be compared on the same footing.
Total ROI versus annualized ROI
Total ROI is (final value − initial investment) ÷ initial investment × 100. If you invest $10,000 and end with $15,000, the total ROI is 50%. That number ignores time, so it is hard to compare across investments. Annualized ROI, also called the compound annual growth rate (CAGR), is (final ÷ initial)1 ÷ years − 1. The same 50% over three years is about 14.5% per year, because compounding at 14.5% for three years produces a 50% total gain.
If the final value is lower than the initial investment, both figures turn negative and represent a loss. If the final value is zero, the annualized return is −100%. A very short holding period can produce a spectacular annualized number from a modest gain, which is why the holding period matters and why short-term annualized returns should be read with caution.
Frequently asked questions
Does ROI include dividends or rent?
This tool uses the final value you enter. To include income, add the dividends, interest, or rent received to the final value before entering it.
What if my investment lost money?
Enter the current or final value even if it is below the initial amount. The net profit and both ROI figures will be negative, showing the size of the loss.
Why is annualized ROI sometimes called CAGR?
Because it is the constant yearly growth rate that would take the initial value to the final value over the holding period. It is a geometric average, not a simple average of yearly returns.