ROI Calculator - Return on Investment Calculator

Basic ROI Formula

Example: If you invested $1,000 and received $1,200, your ROI = [($1,200 - $1,000) / $1,000] × 100 = 20%

Investment Gain Formula

Example: $1,200 - $1,000 = $200 gain

Annualized ROI Formula

Example: For a 20% return over 2 years: [(1.20)^(1/2) - 1] × 100 = 9.54% per year

Understanding Return on Investment (ROI)

Return on Investment (ROI) is a performance measure used to evaluate the efficiency and profitability of an investment. ROI measures the amount of return on an investment relative to the investment's cost.

Key ROI Metrics Explained:

• Investment Gain: The absolute dollar amount gained or lost from your investment.
• ROI Percentage: The percentage return on your investment, showing efficiency relative to the initial investment.
• Annualized ROI: The yearly rate of return, useful for comparing investments of different time periods.

ROI Interpretation:

• Positive ROI: Your investment generated a profit
• Negative ROI: Your investment resulted in a loss
• 0% ROI: You broke even (no gain or loss)

References and Additional Resources

For more information about investment analysis and ROI calculations, please refer to these authoritative sources:

• U.S. Securities and Exchange Commission - Ten Things to Consider Before You Make Investing Decisions
• Investor.gov - How Stock Markets Work
• Federal Reserve - What is the difference between saving and investing?
• U.S. Department of Treasury - Treasury Securities
• Bureau of Labor Statistics - Consumer Price Index (for inflation data)

Frequently Asked Questions

What is a good ROI percentage?

A "good" ROI depends on various factors including the type of investment, time period, and market conditions. Generally, the S&P 500 has historically averaged about 10% annually over long periods, but individual investments can vary significantly.

How is annualized ROI different from regular ROI?

Regular ROI shows the total return over the entire investment period, while annualized ROI shows the equivalent yearly return rate. Annualized ROI is useful for comparing investments with different time periods.

Does this calculator account for taxes and fees?

No, this calculator provides gross returns only. It does not account for taxes, transaction fees, management fees, or other costs that may reduce your actual returns.

Can I use this calculator for any type of investment?

Yes, this calculator works for any investment where you know the initial amount invested and the final amount returned, including stocks, bonds, real estate, business investments, and more.