ROI Calculator
Calculate return on investment and annualized return.
Quick answer
Return on investment (ROI) is the net gain divided by the cost: (final value − initial cost) ÷ initial cost × 100. It measures profitability as a percentage but ignores time, so annualized return is more comparable across investments of different lengths.
Return on investment
40.0%
Gain
$4,000
Annualized (CAGR)
11.87%
ROI vs. CAGR
ROI is the total percentage gain regardless of time; CAGR spreads it into an equivalent yearly rate. A 40% ROI is excellent over 3 years (11.9% CAGR) and mediocre over 10 (3.4%). Always annualize before comparing investments held for different periods.
Count every cost
Honest ROI includes all cash out: fees, taxes, maintenance, and your time where relevant. Real estate 'doubled my money' claims often omit a decade of property tax, insurance, and repairs that cut the true CAGR by several points.
Sources & methodology
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