Why use this calculator
ROI is the universal metric for evaluating the profitability of any investment or business decision. It helps you compare different opportunities and make data-driven choices.
How to use it
Enter the amount invested, the total amount returned (including the original investment), and the time period.
The formula
ROI = (Gain - Cost) / Cost × 100. Annualized ROI = (Return/Investment)^(1/years) - 1.
Worked examples
$10,000 invested, $15,000 returned in 2 years
50% ROI, 22.47% annualized
When people use it
- Investment comparison
- Marketing campaign evaluation
- Business expansion decisions
- Equipment purchase justification
Tips
- Always annualize ROI when comparing investments of different durations
- Include all costs (fees, taxes, opportunity cost) for accurate ROI
- A positive ROI doesn't always mean it was the best use of capital
Questions people ask
- What is a good ROI?
- It depends on the context. The stock market averages ~10% annually. A business investment should ideally exceed your cost of capital. Higher risk investments should demand higher ROI.