ROI Calculator
Calculate return on investment (ROI) and annualized ROI for any investment.
How to Calculate & Use the ROI Calculator
Measure the profitability of your investments using our free ROI calculator. Whether you are analyzing stock performance, real estate investments, or business capital expenses, calculating the Return on Investment (ROI) is crucial. Input your initial investment and total returns to instantly compute your net profit, total ROI, and annualized yield.
Input & Variable Breakdown:
- Amount Invested: Currency amount to be factored.
- Amount Returned: Currency amount to be factored.
- Investment Duration: Bounded variable used in the formulas.
- Duration Unit: Bounded variable used in the formulas.
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Frequently Asked Questions
The formula for Return on Investment (ROI) is: ROI = ((Current Value - Initial Cost) / Initial Cost) * 100. This calculates the percentage gain or loss relative to the investment's original cost.
Absolute ROI shows the total percentage growth of an investment over its entire duration, ignoring time. Annualized ROI calculates the geometric average return per year, allowing investors to compare the performance of assets held for different lengths of time.
A good ROI depends on the asset class and your risk tolerance. Historically, the stock market averages about 7% to 10% annualized ROI after inflation. Real estate yields often range from 6% to 12%, while business ventures target higher margins to offset higher risks.