Use this free ROI calculator to calculate return on investment percentage, net profit, business ROI, marketing ROI, and annualized return examples.
Find ROI percentage and net profit.
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To calculate ROI, subtract your initial investment from the final value to get net profit, divide net profit by the initial investment, then multiply by 100. Example: ($15,000 - $10,000) / $10,000 x 100 = 50% ROI.
ROI (%) = (Net Profit / Initial Investment) x 100
Annualized ROI = [(Final Value / Initial Investment)^(1 / years) - 1] x 100
Use plain ROI for a total-return snapshot, business ROI for project decisions, marketing ROI when campaign profit matters, and annualized ROI or CAGR when comparing investments held for different lengths of time.
An ROI Calculator is a simple tool used to measure the success or profitability of an investment. ROI stands for Return on Investment, and it's one of the most common metrics in all of finance. It answers a very simple question: "How much profit did I make compared to how much I spent?" This investment profit calculator expresses that gain or loss as a simple percentage, making it incredibly easy to compare the investment profitability of different opportunities.
The formula to calculate ROI is very straightforward. You first find the "Net Profit" of the investment, and then you divide that profit by the original cost.
Net Profit = Final Value - Initial Investment
ROI (%) = (Net Profit / Initial Investment) × 100
Let's use the calculator's default values for a simple stock investment:
Calculation Steps:
1. Find Net Profit:
$15,000 (Final Value) - $10,000 (Initial Investment) = $5,000
2. Calculate ROI:
($5,000 (Net Profit) / $10,000 (Initial Investment)) × 100
ROI = 50%
This investment had a Return on Investment of 50%. You earned back 50 cents for every dollar you invested.
This simple investment profit calculator can be used almost anywhere in business and personal finance:
A "good" ROI is completely relative. It depends on the risk, the industry, and the time frame. However, here are some common benchmarks:
The most important thing to note is that ROI does not include TIME. A 50% ROI is amazing if it took 1 year, but it's terrible if it took 20 years. That's ROI's biggest weakness.
Because plain ROI ignores time, the fairest way to compare investments held for different lengths is the annualized ROI - the equivalent return per year. The formula is:
Annualized ROI (%) = [ (Final Value / Initial Investment)(1 / years) - 1 ] × 100
Example: that same $10,000 → $15,000 investment (a 50% total ROI) held for 3 years gives an annualized ROI of (1.5)1/3 - 1 = 14.5% per year. Held for just 1 year, the annualized ROI is the full 50%. Same profit, very different yearly performance - which is exactly why time matters.
Monthly ROI works the same way: divide by months instead of years, or use 1/(months) as the exponent for a compounded monthly figure.
They answer different questions, so smart investors look at both. To get the annualized figure automatically, use our CAGR Calculator.
Searchers often mean different things by ROI calculator, so use the formula that matches the decision you are making. The basic calculator above is best for a single investment, but the same ROI logic also applies to marketing campaigns, projects, payback periods, and side-by-side comparisons.
| Use case | Best formula | When to use it |
|---|---|---|
| Basic ROI | (Final value - Cost) / Cost x 100 | Stocks, resale, one-time purchases, and simple profit checks. |
| Annualized ROI | (Final value / Cost)^(1 / years) - 1 | Comparing returns held for different lengths of time. |
| Marketing ROI | (Gross profit - Ad cost) / Ad cost x 100 | Ad campaigns where revenue is not the same as profit. |
| Project ROI | (Total benefit - Total cost) / Total cost x 100 | Software, equipment, hiring, automation, or business improvements. |
| Payback period | Initial cost / Monthly net benefit | Finding how long it takes to recover the money invested. |
For GSC queries such as free ROI calculator, ROI calculator online, ROI percentage calculator, business ROI calculator, investment ROI calculator, ROI calculator formula, and how do you calculate ROI, this page answers both the simple formula and the practical business cases where ROI is most often used.
The main limitation of ROI is that it does not account for time. A 50% ROI is fantastic if it took 1 year, but it's very poor if it took 20 years (less than 2.5% per year). For comparing investments over different time periods, it's better to use our CAGR Calculator.
A 'good' ROI is entirely relative to the risk and time involved. A 'good' ROI for a safe 1-year government bond might be 5%. A 'good' ROI for a high-risk tech startup investment might be 50% or more. Many investors use the S&P 500's historical average annual return (around 8-10%) as a benchmark to beat.
This simple investment profit calculator does not automatically include them. For the most accurate 'Net ROI' calculation, you should include all fees (like commissions or closing costs) in your 'Initial Investment' and use your 'Final Value' after any capital gains taxes are paid.
Subtract your initial investment from the final value to get your net profit, divide that by the initial investment, and multiply by 100. For example, ($15,000 - $10,000) / $10,000 × 100 = 50% ROI.
Annualized ROI converts your total return into an equivalent yearly rate, so you can compare investments held for different lengths of time. Use the formula [(Final / Initial)(1/years) - 1] × 100. Monthly ROI uses months instead of years. A 50% total return is 14.5% annualized over 3 years, but the full 50% if earned in a single year.
Use the same ROI formula and express the answer as a percent: ROI percentage = ((final value - initial investment) / initial investment) x 100. A $2,000 gain on a $10,000 investment is 20% ROI.
Plain ROI shows total return over the whole period. To compare returns across multiple years, use annualized ROI: [(final value / initial investment)(1 / years) - 1] x 100.
Business ROI is usually calculated as (total benefit - total cost) / total cost x 100. Include implementation cost, software, labor, advertising, fees, and other direct costs so the ROI reflects real net benefit.
ROI measures percentage return compared with cost, while payback period measures how long it takes to recover the initial investment. A project can have a strong ROI but a long payback period, so many business decisions review both.
Calculating ROI is perfect for simple comparisons. For multi-year investments, the next step is to find the annualized return using our CAGR Calculator.
Want the background and formulas behind this calculator? Read the companion guide.
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