ROI calculator
Enter what you put in and got back, get the return.
How do I calculate ROI?
ROI = (what you got back − what you put in) ÷ what you put in × 100. Putting in $1,000 and getting back $1,500 is a $500 gain and a 50% ROI.
What is annualized ROI?
The steady yearly rate that gives the same result: 50% over 3 years is (1.5)^(1/3) − 1 = 14.47% a year — less than 50 ÷ 3, because gains compound.
Can ROI be negative?
Yes — getting back less than you put in gives a negative ROI: $1,000 in and $800 back is −20%.
What should I include in the cost?
Everything you paid: the price plus fees, commissions and upkeep. Leaving costs out makes the ROI look better than it was.
Is a higher ROI always better?
Compare ROIs over the same time and similar risk — that is what the annualized figure is for. A 50% return over 10 years is only 4.14% a year.
Is ROI the same as profit margin?
No. ROI divides the gain by what you put in; profit margin divides the profit by what you sold for. With costs of $1,000 and a sale at $1,500, the profit is $500, which is a 50% return on cost (ROI) but a 33.3% margin on the sale price. Use the margin calculator for pricing and ROI for an investment.
How do I count dividends, rent or other income?
Add everything you received to the amount you got back: the sale proceeds plus the dividends, interest or rent collected along the way. ROI treats the money as one amount in and one amount out, so it cannot show when each payment arrived. If the timing matters, or you added money in the middle, use a calculator for several cash flows such as the NPV and IRR calculator.
How ROI and the annual rate are calculated
ROI is the gain divided by the cost: (returned − invested) ÷ invested. A result of 0% means you broke even, and −100% means everything was lost. The annualized figure converts the total into a yearly rate with compound growth, (returned ÷ invested)^(1 ÷ years) − 1, so it can be compared across holding periods. Without a positive amount returned and a number of years, only the plain ROI is shown.
Worked example: $1,000 becomes $1,500
The gain is $1,500 − $1,000 = $500, and $500 ÷ $1,000 = 50%. Over 3 years that is 14.47% a year. Over 10 years the same 50% would be only 4.14% a year, so a bigger ROI is not a better one unless the periods match: a gain of 80% over 10 years works out to 6.05% a year, far below the 14.47%. Now count costs. With made-up commissions of $10 on the way in and $10 on the way out, you invested $1,010 and kept $1,490, and the ROI falls to 47.52%.
Common mistakes
Leaving out costs is the first. The IRS counts commissions and transfer fees as part of the cost of stocks and bonds, and the same logic applies to any purchase: fees, repairs and upkeep belong in the amount invested. Comparing ROI without the time is the second, as the 10-year example shows. Ignoring risk is the third, since two investments with the same ROI may have very different chances of loss.
Sources: ROI is the standard ratio of gain to cost. For what counts as cost, IRS Topic no. 703, Basis of assets (reviewed September 24, 2026): the basis of stocks and bonds is the purchase price plus costs such as commissions and transfer fees. The annualized figure is the compound growth rate used in the CAGR calculator. The commission amounts in the second example are made up. See also the margin calculator, the NPV and IRR calculator for several cash flows and the real return calculator.
Estimates for planning only — not financial, tax or legal advice. Your lender's or employer's figures decide. How we check our calculators.