ROI Calculator
Calculate return on investment (ROI) to evaluate the profitability and efficiency of an investment or compare multiple investments.
How Is This Calculated?
ROI measures the profitability of an investment as a percentage: ROI = (Final Value - Initial Investment) / Initial Investment × 100 Annualized ROI accounts for the time period: Annualized ROI = ((Final Value / Initial Investment) ^ (1/years) - 1) × 100 A positive ROI means the investment gained value; a negative ROI means it lost value.
Frequently Asked Questions
What is a good ROI?
A 'good' ROI depends on the type of investment and the risk involved. The S&P 500 has averaged about 10% annually. Real estate typically returns 8-12%. Higher-risk investments should have higher expected returns.
Why use annualized ROI?
Annualized ROI allows you to compare investments of different durations on an equal basis. A 50% return over 5 years is different from a 50% return over 1 year.