Finance
ROI Calculator
Calculate Return on Investment (ROI) and annualized return for any investment — stocks, real estate, business, or savings. Enter your initial investment and final value to instantly see your ROI percentage, net profit, and how your return compares to benchmarks.
Quick examples
ROI Formula
ROI = ((Final Value − Initial Cost) ÷ Initial Cost) × 100
Annualized ROI = (Final ÷ Initial) ^ (1 ÷ Years) − 1
ROI Benchmarks by Investment Type (2025)
| Investment Type | Typical Total ROI | Annualized Return | Risk Level |
|---|---|---|---|
| High-yield savings (HYSA) | 4–5% | 4–5% | Very Low |
| US Treasury Bonds (10yr) | 4–5% | 4–5% | Very Low |
| S&P 500 Index (historical) | ~100% per 7yrs | ~10% | Medium |
| Real estate (avg US) | varies | 8–12% | Medium |
| Small business | varies | 15–30% | High |
| Venture capital | varies | 20%+ target | Very High |
Historical averages. Past performance does not guarantee future results. Not financial advice.
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Frequently Asked Questions
What is ROI and how is it calculated?
ROI (Return on Investment) measures how much profit you made relative to your cost. The formula is: ROI = ((Final Value − Initial Cost) ÷ Initial Cost) × 100. For example, if you invested $10,000 and it grew to $13,500, your ROI = ((13,500 − 10,000) ÷ 10,000) × 100 = 35%. ROI doesn't account for time — a 35% ROI over 10 years is very different from 35% in 1 year.
What is a good ROI?
A 'good' ROI depends entirely on the investment type and time period. For context: a high-yield savings account offers 4–5% annually with zero risk. The S&P 500 has historically returned ~10% per year. Real estate averages 8–12% annually. A business investment returning 20%+ annually is excellent. Any ROI above the risk-free rate (currently ~4.5%) needs to justify the additional risk taken.
What is annualized ROI and why does it matter?
Annualized ROI (also called CAGR — Compound Annual Growth Rate) converts your total return into a per-year figure, allowing fair comparison between investments held for different periods. Formula: Annualized ROI = (Final Value ÷ Initial Value)^(1 ÷ Years) − 1. Example: A 50% total ROI over 5 years = 8.45% annualized. A 50% total ROI over 2 years = 22.47% annualized. Very different results.
What is the difference between ROI and CAGR?
ROI is the total percentage gain or loss over the entire holding period. CAGR (Compound Annual Growth Rate) is the annualized ROI — it tells you the equivalent steady yearly return that would produce the same result. CAGR is more useful for comparing multi-year investments. Both are calculated here: ROI gives the full picture, annualized ROI lets you benchmark against yearly rates like savings accounts or stock market averages.
Does ROI account for inflation?
Standard ROI does not account for inflation. To calculate real ROI (inflation-adjusted), subtract the inflation rate from your annualized return. If your annualized ROI is 10% and inflation is 3%, your real ROI is approximately 7%. Over long periods, inflation significantly erodes purchasing power, so real ROI is the more meaningful figure for retirement and long-term planning.
What are the limitations of ROI as a metric?
ROI is simple but has key limitations: it ignores time (a 100% ROI over 20 years is poor), it doesn't account for risk (two investments can have the same ROI but very different risk profiles), it excludes taxes and fees, and it doesn't consider ongoing costs like property maintenance or management fees. For a fuller picture, also consider annualized ROI, risk-adjusted return, and net-of-fees performance.