Roi Calculator

by
ROI Calculator (Return on Investment)
Basic ROI (Investment & Return)Annualized ROI (ROI over Time)Investment Gain (Cost & ROI %)
Analysis Results:
ROI: %
Total Profit: $
Annualized ROI: %
function toggleInputs(){var type=document.getElementById('calculation_type').value;var l1=document.getElementById('label1');var l2=document.getElementById('label2');var l3=document.getElementById('label3');var r3=document.getElementById('row3′);if(type==='basic'){l1.innerHTML='Amount Invested: $';l2.innerHTML='Amount Returned: $';r3.style.display='none';}else if(type==='annualized'){l1.innerHTML='Amount Invested: $';l2.innerHTML='Amount Returned: $';l3.innerHTML='Investment Period (Years):';r3.style.display='table-row';}else if(type==='profit'){l1.innerHTML='Initial Investment: $';l2.innerHTML='Expected ROI %:';r3.style.display='none';}}function calculateROI(){var type=document.getElementById('calculation_type').value;var v1=parseFloat(document.getElementById('input1').value);var v2=parseFloat(document.getElementById('input2').value);var v3=parseFloat(document.getElementById('input3').value);var showSteps=document.getElementById('steps').checked;var roi=0,profit=0,annRoi=0,stepHtml=";if(isNaN(v1)||isNaN(v2)){alert('Please enter valid numeric values');return;}if(type==='basic'){profit=v2-v1;roi=(profit/v1)*100;document.getElementById('annResult').style.display='none';stepHtml='Profit = '+v2+' – '+v1+' = $'+profit.toFixed(2)+'
ROI = ('+profit.toFixed(2)+' / '+v1+') x 100 = '+roi.toFixed(2)+'%';}else if(type==='annualized'){if(isNaN(v3)||v3<=0){alert('Please enter valid years');return;}profit=v2-v1;roi=(profit/v1)*100;annRoi=(Math.pow((v2/v1),(1/v3))-1)*100;document.getElementById('annResult').style.display='block';document.getElementById('annVal').innerHTML=annRoi.toFixed(2);stepHtml='Profit = $'+profit.toFixed(2)+'
Total ROI = '+roi.toFixed(2)+'%
Annualized ROI = [(Final/Initial)^(1/Years) – 1] * 100
Annualized ROI = [('+v2+'/'+v1+')^(1/'+v3+') – 1] * 100 = '+annRoi.toFixed(2)+'%';}else if(type==='profit'){profit=v1*(v2/100);roi=v2;document.getElementById('annResult').style.display='none';stepHtml='Gain = '+v1+' * ('+v2+' / 100) = $'+profit.toFixed(2)+'
Total Value = $'+(v1+profit).toFixed(2);}document.getElementById('roiVal').innerHTML=roi.toFixed(2);document.getElementById('profitVal').innerHTML=profit.toLocaleString(undefined,{minimumFractionDigits:2,maximumFractionDigits:2});if(showSteps){document.getElementById('stepBox').innerHTML=stepHtml;document.getElementById('stepBox').style.display='block';}else{document.getElementById('stepBox').style.display='none';}document.getElementById('answer').style.display='block';}function resetCalculator(){document.getElementById('answer').style.display='none';document.getElementById('stepBox').style.display='none';}

How to Use the ROI Calculator

The roi calculator is a versatile financial tool used by investors, business owners, and individuals to measure the efficiency of an investment or compare the efficiency of several different investments. By calculating the Return on Investment, you can see exactly how much profit (or loss) was generated relative to the initial cost.

To use this calculator, simply choose the type of calculation you wish to perform and enter the corresponding values. Our tool supports basic ROI, annualized ROI for multi-year holdings, and profit projections based on a target percentage.

Amount Invested (Cost)
The total amount of money spent on the investment, including purchase price and any associated fees or commissions.
Amount Returned (Final Value)
The total value received at the end of the investment period, including the sale price and any dividends or interest earned.
Investment Period (Years)
The duration for which you held the investment. This is critical for calculating the annualized roi, which allows for fair comparisons between investments held for different lengths of time.

The ROI Formula and Calculation

The standard roi calculator formula is relatively straightforward. It measures the net gain or loss of an investment divided by the cost of that investment. The result is expressed as a percentage.

ROI = [(Current Value – Cost of Investment) / Cost of Investment] × 100

However, for investments held over different timeframes, the annualized roi formula is used to normalize the returns to a one-year period:

Annualized ROI = [(1 + ROI)^(1/n) – 1] × 100

  • ROI: The total return expressed as a decimal (e.g., 0.20 for 20%).
  • n: The number of years the investment was held.

Calculation Example

Scenario: Imagine you purchased shares in a tech company for $5,000. After 3 years, you sold the shares for $7,500. You want to know both your total return and your yearly performance.

Step-by-step solution:

  1. Identify Initial Cost: $5,000
  2. Identify Final Value: $7,500
  3. Calculate Net Profit: $7,500 – $5,000 = $2,500
  4. Calculate Basic ROI: ($2,500 / $5,000) × 100 = 50%
  5. Calculate Annualized ROI: [(7,500 / 5,000)^(1/3) – 1] × 100 = 14.47%

In this case, while the total profit was 50%, the average yearly gain (accounting for compounding) was 14.47% per year.

Frequently Asked Questions

What is a "good" ROI?

A "good" ROI depends entirely on the risk profile and the asset class. For the stock market (S&P 500), the historical average annualized ROI is roughly 10%. Real estate often yields 7-12%, while savings accounts might yield only 1-4%. Generally, the higher the risk, the higher the ROI an investor should expect.

Does ROI include taxes and fees?

For the most accurate result using an roi calculator, you should subtract all fees (commissions, maintenance, taxes) from your Final Value. This provides a "Net ROI," which reflects the actual cash you get to keep.

What is the difference between ROI and ROE?

ROI measures the return on the total cost of an investment. Return on Equity (ROE) measures the return on the shareholder's equity (assets minus debt). ROE is typically used to judge how effectively a corporation is managing the money shareholders have invested.

Importance of Using an ROI Calculator

Without using a consistent roi calculator, it is difficult to determine if your money is working as hard as it could be. For example, a $2,000 profit might seem great, but if it took 10 years and a $50,000 investment to achieve it, that money would have likely performed better in a basic index fund. By calculating the annualized percentage, you can compare a rental property to a stock portfolio or a startup investment on an apples-to-apples basis.

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