ROI Calculator

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Work out return on investment, annualized return, net profit and payback for any investment, with fees, income and an alternative return to compare.

Quick answer: ROI = (total return − total cost) ÷ total cost × 100. If you put $100,000 in and get $150,000 back after 3 years, this ROI calculator gives a 50% total ROI, $50,000 net profit and an annualized ROI of 14.5%. Annualized ROI is the figure to use when comparing investments held for different lengths of time.

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Required
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$
Optional. One-off costs on top of the amount invested.
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Optional. Dividends, rent or other income received.
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Optional. What you could have earned elsewhere.
Total ROI
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Annualized ROI
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Net Profit
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Payback at Even Pace
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Total Cost
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Value at Alternative Return
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Difference vs Alternative
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How to Use the ROI Calculator

1

Enter the amount invested

Type what you paid to buy or start the investment. Add fees, commissions and other one-off costs in the extra costs field so the full cost is counted.

2

Enter the final value

Type what the investment is worth or what you received when you sold it. This is the total money back, not the profit.

3

Set how long you held it

Enter the holding period and choose years or months. Annualized ROI appears once you have held the investment for at least 12 months.

4

Add income and an alternative return

Optionally enter dividends, rent or other income received while holding, and the yearly return you could have earned elsewhere to compare.

5

Read the results

Check total ROI, annualized ROI, net profit and payback. If you entered an alternative return, the last two figures show what the money would have grown to there and the difference.

What is the ROI formula?

Return on investment is the profit from an investment divided by what it cost, shown as a percentage: ROI = (total return − total cost) ÷ total cost × 100. A 25% ROI means you earned $0.25 for every $1 you put in. Total return is the final value plus any income you received while you held it, and total cost is the amount invested plus fees and other costs.

📐 ROI formulas

ROI = (Total return − Total cost) ÷ Total cost × 100%
Annualized[(1 + ROI)^(1 ÷ years) − 1] × 100%, shown from 12 months
PaybackMonths held × Total cost ÷ Total return
AlternativeTotal cost × (1 + alternative return)^years

Worked example: the sample figures in the required fields

You invest $100,000 and get $150,000 back after 3 years. Net profit is $50,000 and ROI is $50,000 ÷ $100,000 = 50%. Annualized ROI is (1.5^(1÷3) − 1) = 14.5% a year. At an even pace the money is back after 3 years × 12 × $100,000 ÷ $150,000 = 24 months.

A smaller case: $25,000 grows to $32,000 over 2 years. ROI is $7,000 ÷ $25,000 = 28%, and annualized ROI is (1.28^(1÷2) − 1) = 13.1% a year. A 28% total sounds the same whether it took 2 years or 20, but the annualized figure shows the difference.

How does annualized ROI relate to compound interest?

Annualized ROI is the single yearly rate that, compounded, turns your cost into your final value. It is the same arithmetic as the Compound Interest Calculator run in reverse: instead of asking what a rate produces, you ask what rate your result implies. That is why 14.5% a year over 3 years gives 50%, not 43.5%.

ROI for stocks and crypto

Enter the purchase price as the amount invested, the sale value as the final value, and trading fees as extra costs. Say you buy $20,000 of shares, pay $150 in fees, receive $600 of dividends and sell for $23,000 after 18 months. Total cost is $20,150, total return is $23,600, net profit is $3,450 and ROI is 17.1%, or 11.1% a year. Crypto works the same way, with exchange fees in extra costs.

ROI for rental property and real estate

For a property, the amount invested is the price you paid, closing and renovation costs go in extra costs, rent you kept after running costs goes in income, and the sale price is the final value. Buy for $200,000, spend $10,000 on costs, keep $36,000 of net rent over 3 years and sell for $230,000: total cost is $210,000, total return is $266,000 and ROI is 26.7%, or 8.2% a year. ROI covers the whole holding period, so for a single year's picture use the Cap Rate Calculator or the Rental Yield Calculator.

Marketing ROI and ROAS

Marketing ROI uses profit, not sales. A campaign cost $5,000 in ads plus $1,000 in creative and staff time and produced $18,000 of sales at a 40% gross margin. Gross profit is $7,200, so enter $6,000 as the amount invested and $7,200 as the final value over 3 months: ROI is 20%. ROAS on the same campaign is $18,000 ÷ $5,000 = 3.6, which looks far better and ignores margin and costs beyond ads.

What about the ROI of a college degree?

The same formula works, but the return arrives over many years, so treat it as an estimate. As an illustration, a degree that costs $80,000 in tuition and living costs and adds $10,000 a year of earnings for 20 years has a total return of $200,000, an ROI of 150% and an annualized ROI of about 4.7%. Add the earnings you gave up while studying to the cost, and use a cash-flow tool such as IRR if you want precision.

How do ROI, IRR, NPV and payback differ?

ROI compares one cost with one total return and ignores when cash arrives. IRR finds the single yearly rate that makes the present value of all cash flows zero, which suits investments with several payments at different dates. NPV discounts future cash to today's money at a rate you choose. Payback only measures how fast the cost is recovered and ignores what comes after. ROI is the quick filter, and IRR or NPV suit larger capital decisions.

What are typical returns by asset class?

There is no universal good ROI, but history gives a yardstick. These are compound annual returns for US assets from 1928 to 2025, calculated from the dataset's own cumulative values. They are nominal, before tax and inflation, and past returns do not predict future ones.

Nominal returns before tax and inflation, from Damodaran, NYU Stern (January 2026)
Asset (US, 1928 to 2025)$100 grew toCompound annual return
US stocks (S&P 500, with dividends)$1,157,59910.0%
Baa corporate bonds$53,9526.6%
Gold$21,0255.6%
10-year Treasury bonds$7,7534.5%
US real estate (dataset series)$5,6264.2%
3-month Treasury bills$2,5783.4%

The real estate and gold lines are the dataset's own series, which the dataset page does not define, so treat those two as indicative. The 98-year span smooths out decades of very different results, so a single year or a ten-year window can look far better or worse. Compare your own annualized ROI with the asset class that matches your risk, not with the best line in the table.

How do I calculate ROI in Excel or Google Sheets?

Put the amount invested in B1, final value in B2, years held in B3, income in B4 and extra costs in B5, then use:

Total ROI        =(B2+B4-B1-B5)/(B1+B5)
Annualized ROI   =((B2+B4)/(B1+B5))^(1/B3)-1
Net profit       =B2+B4-B1-B5
Payback (months) =B3*12*(B1+B5)/(B2+B4)

Format the first two cells as percentages. For irregular cash flows on known dates, Excel and Google Sheets also have XIRR, which handles what simple ROI cannot.

Monthly or yearly: which period should I use?

Use whichever unit you know. Choose Months for a campaign or a short trade and Years for longer holds. Total ROI does not change with the unit. The annualized figure appears only from 12 months, because a yearly rate extrapolated from a few months can mislead.

What mistakes make an ROI look better than it is?

Leaving out costs is the most common mistake: fees, taxes, maintenance, your own time and the cost of borrowing. Mixing revenue with profit is second. Ignoring time comes next, which is why annualized ROI exists. Also check that you compare like with like, since a rental's ROI over 5 years and a stock trade's ROI over 6 months are not directly comparable.

Does this change by country?

The arithmetic does not. The dollar sign is a label, so enter amounts in your own currency. Tax is what differs: capital gains, dividend and rental income are taxed differently in the US, UK, Australia and Canada. The calculator is pre-tax, so subtract your tax from the final value or add it to extra costs to see an after-tax figure.

What to do with the result

Compare the annualized ROI with your alternative return, then ask whether the gap pays for the extra risk. To judge a business spend, pair it with the Break Even Calculator or the AI Automation ROI Calculator, and check margins with the Profit Margin Calculator.

⚠️ Disclaimer This calculator gives a simplified, pre-tax ROI estimate from the figures you enter. Real returns depend on risk, market conditions and costs a simple formula misses, so treat the result as a planning aid, not investment advice. Past returns do not predict future ones.

Frequently Asked Questions

It depends on what else you could have done with the money. From 1928 to 2025 US stocks compounded at about 10.0% a year, 10-year Treasury bonds at about 4.5% and 3-month Treasury bills at about 3.4%, before tax and inflation (Damodaran, NYU Stern). An investment is good when its annualized ROI beats a comparable alternative after its extra risk.
ROAS divides revenue by ad spend, while ROI divides profit by cost, so they can disagree. $40,000 of sales from $10,000 of ads is a ROAS of 4, but at a 20% gross margin the profit is $8,000 and ROI is -20% before any other cost. Judge campaigns on ROI and use ROAS as a quick signal.
Yes to both. If you get back less than you put in, ROI is negative, and it bottoms out at -100% when you lose everything. If you get back more than double your cost, ROI passes 100%. Very large figures usually mean the cost is small or a cost was left out, so recheck your inputs.
Annualized ROI appears only for holding periods of 12 months or more. Turning 3 months of gain into a yearly rate compounds it four times, so a 10% gain would read as 46% a year, a pace few investments repeat. Total ROI is always shown, whatever the period.
Divide one plus your annualized ROI by one plus the yearly inflation rate, then subtract one. With a 6% annualized ROI and 3% inflation, the real return is 1.06 ÷ 1.03 − 1 = 2.9% a year. That is the gain in buying power, and it is still before tax.
It means the total you got back, including any income, is less than your total cost, so the cost has not been recovered within the holding period. Check that you entered the final value rather than the profit. If your returns arrive in lumps, work out payback from your actual cash flows.

Sources and method

The ROI, annualized ROI, payback and alternative-return formulas are standard finance arithmetic. The asset-class returns use one outside source.