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ROI Calculator

Turning $10,000 into $15,000 over 3 years is a 50% total ROI but a 14.47% annualized return. Return on investment (ROI) expresses a gain as a percentage of what was paid — (final value − cost) / cost — and because total ROI ignores time, the calculator also annualizes it as a compound annual growth rate (CAGR), which makes returns over different periods comparable.

Total ROI
50.00%
Annualized return
14.47%
Net gain
$5,000
Multiple
1.50×
A 50.0% gain, about 14.5% a year
Up $5,000 — the 14.5%/year figure is what's comparable across holding periods, before dividends, fees, and taxes.
Inputs
Invested $, now worth $ after years
Judge it on the annualized rate
That 50.0% total return over 3 years is really about 14.5%/year. Total ROI flatters long holds — the annualized figure is what you compare across investments of different lengths.
Where that annual return sits
As reference points, cash has recently earned roughly 4% and the S&P 500 has averaged about 10% nominal long-term. Your 14.5%/year lands above the long-run index average.
What this leaves out
The figure ignores dividends, interim cash flows, fees, and taxes. Reinvested dividends can lift a real-world return well above the price-only number shown here.
Ask a follow-up
Uses your inputs above
50.00% total roi. Want to try a variation?

The math

Reviewed 2026
Formula
ROI = (V − C) / C · 100; CAGR = (V/C)^(1/t) − 1
V value · C cost · t years

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Example: how roi is calculated

Step-by-step with default inputs

Suppose you put the default values into ROI Calculator:

Initial cost
$10,000
Final value
$15,000
Holding period
3 years

Plug those into the formula ROI = (V − C) / C · 100; CAGR = (V/C)^(1/t) − 1 and the result is:

Total ROI
50.00%

How to calculate roi by hand

  1. Subtract the cost from the final value for the net gain: $15,000 − $10,000 = $5,000.
  2. Divide by the cost and multiply by 100: $5,000 / $10,000 = 50% total ROI.
  3. For the annualized rate, divide value by cost and raise to the power 1/t: 1.5^(1/3) ≈ 1.1447.
  4. Subtract 1 and convert to percent: about 14.47% per year.

How does the roi calculator work?

Two standard formulas from the Investopedia reference. Total ROI is the net gain divided by the initial cost, times 100 — a pure percentage with no time dimension. The annualized figure is the compound annual growth rate, (V/C)^(1/t) − 1: the single yearly rate that would compound the cost into the final value over the holding period. The calculator deliberately ignores everything between the endpoints — dividends, added capital, taxes, and fees — so it is exact for a buy-and-hold position with no interim cash flows and an approximation for anything else.

References: Investopedia: ROI.

Last reviewed July 2, 2026 · Editorial policy

Frequently asked questions

What is the difference between ROI and annualized return?

ROI is the total percentage gain regardless of how long it took; annualized return (CAGR) spreads that gain over the holding period as a compound yearly rate. A 50% ROI is 14.47% a year over 3 years but only 4.14% a year over 10.

Why not just divide the total ROI by the number of years?

Because growth compounds. Dividing 50% by 3 suggests 16.7% a year, but compounding 16.7% for 3 years produces about 58.8%, not 50%. CAGR — 14.47% here — is the rate that actually reproduces the result.

Can ROI be negative?

Yes — whenever the final value is below the cost. A $10,000 position now worth $8,000 is a −20% ROI, and over 3 years that is a CAGR of about −7.2% a year.

How accurate is this roi calculator?

The math is deterministic — the same inputs always produce the same output, and the formula is shown above. Accuracy of the answer for your situation depends on how well your inputs match reality and how well the formula models the question.

Why is my bank's number different?

Banks add fees, taxes, insurance, and product-specific terms that this calculator deliberately omits to keep the math transparent. Use this to sanity-check a quote, not to replace it.

How do I share my result?

Hit Share at the top of the page. Every input you change is encoded in the URL, so a permalink reproduces exactly what you see. No account needed.