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PlainCalc

ROI Calculator

Total return and annualized return for anything you put money into, from stocks to a rental to a marketing campaign.

Updated October 2026

Investment
$
$
$
Holding period
Return on investment
45.0%
Gain of $4,500 on $10,000 total cost
Cost · 69%Gain · 31%
Annualized return
13.19%
per year over 3.0 yrs
Net profit
$4,500
Total cost
$10,000
A 45% total return over 3.0 years is 13.2% per year. Compare that to ~10% for the S&P 500 long-term average and ~4.5% for a high-yield savings account.
ROI Calculator45.0%Results ↓

ROI formula

ROI = (Final value − Total cost) ÷ Total cost × 100. Invest $10,000, pay $0 in fees, get back $14,500: ROI = 4,500 ÷ 10,000 = 45%. Total cost should include everything you spent to get the return: purchase price, fees, taxes, repairs, advertising. Leaving costs out is the most common way ROI gets overstated.

Why annualized ROI matters more

A 45% return is great over one year and mediocre over ten. Annualized return (also called CAGR, compound annual growth rate) converts the total return into a per-year rate so you can compare investments with different holding periods: CAGR = (Final ÷ Cost)^(1 ÷ years) − 1. That same 45% over three years is 13.2% per year; over ten years it's just 3.8%, worse than a savings account. Always enter the holding period.

Using ROI for business decisions

  • Marketing: spent $2,000 on ads that produced $6,000 in gross profit (not revenue): ROI 200%. Use gross profit, not revenue, or the number is meaningless.
  • Equipment: a $15,000 machine saves $500/month in labor: after 3 years it has returned $18,000, ROI 20%, about 6.3% per year. Compare to the loan rate you'd pay for it.
  • Rental property: cash-on-cash ROI = annual cash flow ÷ cash invested. Add appreciation at sale for total ROI.
  • Education: tuition + lost wages versus the salary increase over a career. A long horizon makes even modest annual returns add up.

ROI vs. other measures

ROI ignores *when* cash flows happen, which is fine for a single investment with one cash-out. For projects with cash coming in over many years, NPV and IRR are more accurate. For a quick screen, ROI and annualized ROI are usually enough: if the annualized figure doesn't beat what you'd earn in a low-risk alternative (currently ~4%–5%) plus a margin for risk, the investment isn't worth it.

Frequently asked questions

What is a good ROI?+

It depends on risk and time. Long-term stock market returns average about 10% per year; a safe savings account pays 4%–5%. A business project should usually clear 15%–20% annualized to justify the effort and risk.

How do I calculate ROI on a rental property?+

Total cost is your down payment plus closing costs and any renovation. Annual return is rent minus mortgage, taxes, insurance, maintenance, and vacancy. Enter one year's net cash flow plus your invested cash as the final value to get cash-on-cash ROI for the year.

What's the difference between ROI and CAGR?+

ROI is the total percentage gain over the whole period. CAGR (annualized return) is the constant yearly rate that would produce that gain, which makes investments of different lengths comparable. Both are shown above.

Can ROI be negative?+

Yes, when the final value is less than what you put in. A -20% ROI means you lost a fifth of your investment.