How to use it
- Enter the amount invested.
- Add any extra costs such as fees or commissions.
- Enter the amount you got back or the current value.
- Optionally add the number of years to see the annualized return.
What ROI measures
Return on investment shows how much you gained or lost relative to what you put in, as a percentage. It is a quick way to compare investments of different sizes: a $500 gain on $2,000 (25%) beats a $1,000 gain on $10,000 (10%).
The calculator adds your extra costs to the amount invested, then shows the ROI, the net gain or loss, and the compound annual growth rate (CAGR) if you enter how many years you held the investment. Everything runs in your browser. The results are estimates for planning and are not financial advice.
ROI and CAGR formulas
ROI = (amount returned − total cost) / total cost × 100
CAGR = (amount returned / total cost)^(1 / years) − 1
Example: you invest $10,000 and three years later it is worth $13,500.
- ROI = (13,500 − 10,000) / 10,000 = 35%
- Net gain = $3,500
- CAGR = (13,500 / 10,000)^(1/3) − 1 ≈ 10.52% a year
If the purchase cost $100 in commissions, total cost becomes $10,100 and ROI drops to about 33.66%.
Why annualized return matters
ROI ignores time. A 35% return over 3 years and a 35% return over 10 years have the same ROI but very different annual rates:
| Total ROI | Years | CAGR |
|---|---|---|
| 35% | 3 | 10.52% |
| 35% | 5 | 6.19% |
| 35% | 10 | 3.05% |
Use CAGR to compare investments held for different lengths of time, or to compare against a benchmark such as a savings rate or an index fund's average return.
Common uses and pitfalls
- Real estate: include closing costs, repairs and selling costs in the cost, and rental income in the amount returned.
- Marketing: compare revenue or profit attributed to a campaign with what the campaign cost.
- Equipment or software: compare savings over a period with the purchase price.
Pitfalls: ROI does not account for risk, taxes or inflation, and it treats all money as arriving at the end. For investments with cash flows over several years, the present value calculator computes NPV and IRR, which handle timing properly.
Worked example: a rental property
You buy a rental condo for $200,000 and pay $8,000 in closing costs. Over 5 years you collect $60,000 in rent after expenses, then sell for $230,000 and pay $14,000 in selling costs.
- Total cost: 200,000 + 8,000 = $208,000
- Amount returned: 60,000 + 230,000 − 14,000 = $276,000
- ROI: (276,000 − 208,000) / 208,000 ≈ 32.7%
- CAGR over 5 years: (276,000 / 208,000)^(1/5) − 1 ≈ 5.8% a year
This simple view ignores mortgage financing, taxes and the timing of rent payments, so treat it as a first check. The calculator runs in your browser and saves nothing.
If the purchase was financed, many investors also look at cash-on-cash return: yearly cash flow divided by the cash they actually put in (down payment plus closing costs). Leverage can make that figure much higher than the ROI on the full price, but it also magnifies losses. Run the numbers both ways before deciding whether a deal is worth the risk and the work.
Frequently asked questions
How do I calculate ROI?
Subtract the total cost from the amount returned, divide by the total cost and multiply by 100.
What is a good ROI?
It depends on the risk and time involved. Compare the annualized return (CAGR) with alternatives of similar risk.
What is the difference between ROI and CAGR?
ROI is the total percentage return. CAGR spreads it into an equivalent yearly rate over the holding period.
Should I include fees?
Yes. Commissions, fees and other costs reduce your real return; enter them as additional costs.
Can ROI be negative?
Yes. If you got back less than you put in, ROI is negative and the calculator shows a loss.
Last updated: November 12, 2026