Finance Calc App

US ROI calculator

Work out the return on an investment — total ROI, net profit, and the annualised (compound) return — so you can compare investments held for different lengths of time on a level footing.

By Mitch Duncan Last reviewed Methodology

Investment details

ROI is measured against your total invested capital (initial investment plus any costs). The annualised return assumes a single lump-sum invested for the whole period.

Total return (ROI)
50.0%
Net profit
$5,000.00
Breakdown
Total invested
$10,000.00
Final value
$15,000.00
Profit
$5,000.00
Annualised return (CAGR)
14.5% / year

A 50.0% total return over 3 years works out to roughly 14.5% a year, compounded — useful for comparing investments held for different lengths of time.

Want the full picture? Dollar-Cost Averaging Explained →

How ROI is calculated

Return on investment (ROI) measures how much an investment earned relative to its cost. The basic formula is:

ROI = (final value − total invested) ÷ total invested

"Total invested" is your initial outlay plus any additional costs or fees, so the result reflects your true net return rather than a flattering gross figure.

Why annualised return matters more

A 50% total return sounds impressive — but over 10 years it's mediocre, while over one year it's exceptional. To compare investments held for different periods, use the annualised return (compound annual growth rate, CAGR):

CAGR = (final value ÷ total invested)(1 ÷ years) − 1

This converts any total return into the equivalent steady yearly rate, putting a quick flip and a decade-long hold on the same footing.

Worked example

Invest 10,000, sell for 15,000 after 3 years, with 0 in extra costs:

So a headline 50% gain is really about 14.5% compounded annually — still good, but very different from 50% in a single year.

Watch out for these

What this calculator doesn't cover

For investments with regular contributions, use the compound interest or savings goal calculators, which model money added over time.

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Frequently asked questions

What is ROI and how is it calculated?
Return on investment (ROI) is the gain or loss on an investment relative to its cost. The formula is (final value − total invested) ÷ total invested, expressed as a percentage. 'Total invested' includes your initial outlay plus any fees or costs, so the figure reflects your true net return rather than a gross headline number.
What's the difference between total ROI and annualised return?
Total ROI is the overall percentage gain across the whole holding period, ignoring how long it took. Annualised return (CAGR) converts that into an equivalent steady yearly rate. A 50% total return over 3 years is about 14.5% a year compounded — so always check the time period before comparing two investments.
What counts as a good ROI?
It depends on the asset, the risk, and the timeframe. As a rough benchmark, broad stock markets have historically returned around 7% a year after inflation over the long run. A 'good' ROI beats what you could earn from a low-risk alternative for similar risk — and always look at the annualised figure, not just the headline total.
Should I include fees and taxes in ROI?
Yes, if you want an accurate picture. Transaction fees, platform charges, and taxes all reduce your real return. Add costs to your total invested (and use the net final value after any selling fees) so the ROI reflects what actually landed in your pocket.
Does this calculator account for inflation?
No — it shows nominal returns. To estimate the real (inflation-adjusted) return, subtract the average inflation rate over the period from the annualised return. For example, an 8% annualised return during 3% average inflation is roughly 5% in real terms.
How do I work out ROI when I added money over time?
This calculator assumes a single lump sum invested for the whole period. If you contributed regularly, a simple ROI overstates or understates the true return because each contribution was invested for a different length of time. Use the compound interest or savings goal calculator for investments with ongoing contributions.

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