Free ROI calculator. Calculate return on investment, annualized returns, and compare investment options.

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💡 Financial Tip: Compare to the market benchmarkRule
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ROI Calculator

Calculate return on investment for business decisions and investment ventures.

Total ROI
50.00%
Annualized ROI
22.47%
Net Profit/Loss
+$5 000

Investment Breakdown

Investment Analysis

Initial Investment:$10 000
Final Value:$15 000
Net Profit/Loss:+$5 000
Total ROI:50.00%
Annualized ROI:22.47%
🎉 Excellent return! This investment has performed very well.

📚 What is ROI (Return on Investment)?

ROI measures the efficiency of an investment by comparing the profit or loss to the initial investment amount. It's expressed as a percentage and helps evaluate the profitability of different investments.

Annualized ROI accounts for the time period, allowing you to compare investments with different holding periods. A 50% return over 10 years is different from 50% over 1 year.

Example: Investing $10,000 and receiving $15,000 after 2 years gives a 50% total ROI and 22.5% annualized ROI.

💡 Understanding ROI Benchmarks

  • Stock Market: Historically 7-10% annual return (S&P 500 average)
  • Bonds: Typically 3-6% annual return depending on type
  • Real Estate: 8-12% annual return including appreciation and rental income
  • Business Ventures: Variable - can be negative or exceed 50% annually
  • Savings Accounts: 1-5% annual return (low risk, low reward)

❓ Frequently Asked Questions

Q: What's a good ROI?
A: It depends on the investment type and risk. Generally, beating the S&P 500 (7-10%) is considered good for stocks. Higher risk should yield higher returns.
Q: Does ROI account for inflation?
A: No, ROI is nominal. Real ROI subtracts inflation to show actual purchasing power gained. A 10% ROI with 3% inflation = 7% real return.
Q: Should I only look at ROI when investing?
A: No. Consider risk, liquidity, time horizon, taxes, and diversification. High ROI often comes with high risk - assess your risk tolerance.

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