ROI Calculator

Use it when an investment is finished, or you can value it today, and you want to know whether it paid off: how many dollars you made, what that is as a percentage, and what yearly rate it works out to. It looks back at one sum going in and one value coming out.

With the defaults, $10,000 that became $14,000 over 3 years shows:

• ROI 40.00%: (final − invested) ÷ invested × 100
• Net profit $4,000
• Annualized ROI 11.87%: (final ÷ invested)^(1 ÷ years) − 1

The holding period only affects the last line. The same 40% spread over 10 years is 3.42% a year.

The result is only as honest as the two amounts. Put every dollar you paid into the first box and every dollar you got back, net of costs, into the second.

Say you bought $10,000 of shares and paid a $50 commission, collected $600 of dividends as cash along the way, and sold for $14,000 less another $50 commission:

• Amount invested: $10,000 + $50 = $10,050
• Final value: $14,000 − $50 + $600 = $14,550

Over 3 years that gives an ROI of 44.78%, a $4,500 profit and 13.13% annualized. Leaving the dividends out would understate the return. Leaving the commissions out would overstate it.

For a project or a purchase rather than a security, the same rule applies. Include setup costs, repairs and fees in the amount invested, and count income received as part of the final value.

• Losses. $10,000 that fell to $7,000 over 2 years shows −30.00%, a −$3,000 net profit and −16.33% a year.
• Months. Enter the holding period in years: 18 months is 1.5 and 9 months is 0.75. The arrows move in quarter-year steps, but you can type a value such as 1.4.
• Short holds. A 5% gain in 6 months ($10,000 to $10,500) annualizes to 10.25%. That figure assumes you could repeat the result every six months, which is rarely a safe assumption for a one-off trade.
• Zero invested. If the first box is 0, there is nothing to divide by and the percentages show no figure.

The annualized ROI line uses the same formula as the CAGR calculator, so the two will agree for the same inputs. Choose this one when you also want the dollar profit and the total percentage. Choose the CAGR calculator when you are measuring growth of something that isn't your own cash in and out, such as revenue or a price index.

Neither tool handles money added along the way. If you invested monthly, dividing the gain by the total you put in ignores that later deposits had less time to grow. For forward projections with regular deposits, use the investment calculator. For a quick sense of how long a rate takes to double money, the rule of 72 calculator is faster.