ROI Calculator
Measure return on investment as a percentage, with an annualised figure for multi-year holdings.
About the ROI Calculator
Return on investment (ROI) compares what you gained with what you put in. Enter the amount invested and the amount you got back (sale price plus any income received); add the holding period to see the yearly rate.
A 50% ROI over 10 years is much less impressive than over 1 year, so the annualised figure, the compound yearly rate, is the fair way to compare investments, projects or marketing spend of different lengths.
The formula
ROI = (final − cost) ÷ cost × 100; annualised = (final ÷ cost)^(1/years) − 1
- cost
- everything you paid in, including fees and commissions
- final
- everything you got back: sale value plus income such as dividends or rent
- years
- how long the money was invested
Worked example
Bought for 10,000, sold for 14,500 three years later
- Gain: 14,500 − 10,000 = 4,500
- ROI = 4,500 ÷ 10,000 = 45%
- Annualised = 1.45^(1/3) − 1 = 13.19% a year
Things to keep in mind
- Assumes one amount in and one amount out. For several deposits or withdrawals at different times, use the XIRR Calculator.
- Before tax and inflation unless you include them in the figures.
Questions people ask
Should I include fees?
Yes: add buying fees to the cost and subtract selling fees from the final amount for a true ROI.
ROI vs CAGR?
Annualised ROI is the same as CAGR.
What is marketing ROI?
The same formula with campaign cost as the cost and the profit it generated as the gain. Use the ROAS Calculator for revenue per unit of ad spend.