Investment ROI Calculator
Calculate the return on your investment portfolio. Whether it's stocks, mutual funds, bonds, or real estate, measure your investment performance with annualized returns and total profit calculations.
Understanding Return on Investment (ROI)
Return on Investment (ROI) is the most widely used metric for evaluating investment profitability. It measures the percentage gain or loss on an investment relative to its cost. While simple to calculate, ROI has a key limitation—it doesn't account for time.
ROI and CAGR Formulas
ROI = ((Final Value - Initial Investment) / Initial Investment) × 100
CAGR = ((Final Value / Initial Value)^(1/Years)) - 1
Example Calculations
| Initial | Final | Period | ROI | CAGR |
|---|---|---|---|---|
| $25,000 | $45,000 | 7 years | 80% | 8.77% |
| $100,000 | $180,000 | 5 years | 80% | 12.47% |
Why CAGR Matters
A 50% ROI sounds great, but context matters. 50% over 1 year is excellent (equivalent to 50% CAGR), but 50% over 10 years is poor (only 4.14% CAGR). CAGR normalizes returns to an annual rate, allowing fair comparison between investments held for different periods.
ROI Benchmarks by Investment Type
- Stock Market (S&P 500): ~10% annual historical return
- Real Estate: 8-12% annual return (including rental income)
- Bonds: 3-6% annual return (lower risk)
- Savings Account: 0.5-2% annual return
- Venture Capital: 15-25% target IRR (high risk)
Frequently Asked Questions
How do I calculate ROI on stocks?
Stock ROI = ((Current Value + Dividends - Purchase Price) / Purchase Price) × 100. Include dividends received for total return. Our calculator helps you find both absolute ROI and annualized CAGR.
What affects investment ROI?
ROI is affected by market conditions, timing, fees, taxes, and compound growth. Longer investment periods typically yield better results due to compounding. Consider reinvesting dividends for higher returns.