Investment ROI Calculator
Calculate your total return and annualized growth rate easily.
Your Results
Understanding ROI (Return on Investment)
ROI is a popular profitability metric used to evaluate how well an investment has performed. Whether you are investing in the stock market, real estate, or a marketing campaign for your business, knowing your ROI helps you make informed financial decisions.
The ROI Formula
The basic ROI calculation is straightforward:
While the basic ROI gives you a snapshot of growth, the Annualized ROI is often more useful. It accounts for the time the money was invested, allowing you to compare a 5-year investment with a 1-year investment on equal terms.
Practical ROI Example
Scenario: You invest $5,000 in a digital marketing campaign. At the end of the month, that campaign generated $7,500 in new sales.
- Initial Cost: $5,000
- Gain: $2,500 ($7,500 – $5,000)
- ROI: ($2,500 / $5,000) x 100 = 50%
Why Annualized ROI Matters
If you earn 20% on an investment over 10 years, that is significantly different from earning 20% in 6 months. Our calculator uses the Compound Annual Growth Rate (CAGR) formula to provide your annualized return, which is essential for long-term wealth planning.