It lets you compare very different investments on a single, like-for-like basis.

7-10% per year (long-run market)

What are common roi mistakes?

Ignoring time — comparing a 1-year and a 10-year return with simple ROI.

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ROI Calculator

Return on Investment: (Gain − Cost) / Cost × 100.

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Best for: Use it to evaluate a past investment, compare options on equal footing, or judge a marketing/project spend against its return.

Complete guide

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How it's calculated & sources

The ROI Calculator uses the standard formula for this calculation. It runs entirely in your browser, so your inputs are never uploaded. Figures are educational estimates, not professional advice — verify important decisions with a qualified expert. Last reviewed June 2026.

Key assumptions

Ignores how long the investment was held
Before inflation, taxes and fees

Free & no sign-up · runs entirely in your browser. Results are estimates for general information, not professional advice — verify important decisions with a qualified expert. Last reviewed June 2026.

How it works

ROI = (Final value − Initial cost) / Initial cost × 100

Example

$10,000 invested grows to $13,500 → ROI = 35%.

Frequently asked questions

Does ROI account for time?+

No — that's why annualized return is more useful for comparing investments of different durations.

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Quick answers

Short, sourced answers to the questions people (and AI assistants) ask most.

What is ROI?: An ROI (return on investment) calculator measures how much you gained or lost on an investment relative to its cost, as a percentage. It's the universal yardstick for comparing very different investments on the same scale.
Why does ROI matter?: It lets you compare very different investments on a single, like-for-like basis.
How is ROI calculated?: It subtracts the cost from the final value to get net gain, divides by the cost, and (optionally) annualizes the result over the holding period. Formula: ROI = (final value − cost) ÷ cost × 100; Annualized ROI = (final ÷ cost)^(1 ÷ years) − 1.
What is a good roi?: 7-10% per year (long-run market)
What are common roi mistakes?: Ignoring time — comparing a 1-year and a 10-year return with simple ROI.
When should you use the ROI Calculator?: Use it to evaluate a past investment, compare options on equal footing, or judge a marketing/project spend against its return.

What is the ROI Calculator?

An ROI (return on investment) calculator measures how much you gained or lost on an investment relative to its cost, as a percentage. It's the universal yardstick for comparing very different investments on the same scale.

How the ROI Calculator works

It subtracts the cost from the final value to get net gain, divides by the cost, and (optionally) annualizes the result over the holding period.

ROI = (final value − cost) ÷ cost × 100; Annualized ROI = (final ÷ cost)^(1 ÷ years) − 1

cost — Total amount invested
final value — What the investment is now worth (incl. income)
years — Holding period, for annualizing

Enter your return on investment (roi) — the percentage gain or loss on an investment relative to what you put in.
Enter your investment amount — the money you put into an investment, either as a lump sum or over time.
Read the result, then change any input to compare scenarios instantly — the ROI Calculator recalculates as you type.

Understanding the inputs

What each value means, why it matters, and a typical range — so you can fill in the calculator with confidence.

Return on Investment (ROI)

The percentage gain or loss on an investment relative to what you put in.

Why it matters:: It lets you compare very different investments on a single, like-for-like basis.
Typical range:: Stock markets have returned roughly 7% to 10% per year long term; short term anything is possible.

How it affects results:

Higher: Faster growth, but unusually high returns often carry more risk - sanity-check assumptions.
Lower: Slower growth; below about 7% trails long-run market averages.

Common mistake: Ignoring the time period - 50% over ten years is very different from 50% in one year.

Investment Amount

The money you put into an investment, either as a lump sum or over time.

Why it matters:: It is the base your returns compound on - more invested means more growth.
Typical range:: Any amount; there is no standard value.

How it affects results:

Higher: Larger final value, assuming the same return.
Lower: Smaller final value.

Common mistake: Entering a monthly amount where a one-time lump sum is expected.

Component definitions

The parts that drive this result and what each one contributes.

Initial value — What you put in.
Final value — What it became.
Gain — Final minus initial — the profit being measured.

Benchmark reference

What counts as poor, average or excellent for this metric.

Return on Investment

Poor	Negative (loss)
Below average	0-5%
Average	5-10%
Above average	10-20%
Excellent	20%+

Source: Long-run stock-market average (~7-10%/yr nominal) · Updated June 2026

Typical values

Return on Investment:: 7-10% per year (long-run market)

Common interpretation errors

Comparing short and long time periods
Ignoring inflation
Ignoring risk and fees

What impacts results most

1.
Final value (High impact)ROI rises directly with the ending value / gain.
2.
Initial value (High impact)A lower cost basis raises ROI for the same gain.

Key assumptions

Ignores how long the investment was held
Before inflation, taxes and fees

What's a typical value?

For context, the U.S. S&P 500 has returned roughly 10% per year on average over the long run (about 7% after ~3% inflation). 'Good' ROI is relative to risk and to alternatives like that market benchmark; higher returns generally carry higher risk.

Annualized vs simple ROI (50% total gain)

1 year	50%
3 years	~14.5%/yr
5 years	~8.4%/yr
10 years	~4.1%/yr

ROI vs CAGR vs annualized ROI

	Simple ROI	Annualized ROI / CAGR
Accounts for time?	No	Yes
Best for	One-off, short holds	Comparing across different durations
Formula	(gain) ÷ cost	(final ÷ cost)^(1/years) − 1

Key terms

ROI:: Return on investment — net gain as a % of cost.
Net gain:: Final value minus the amount invested.
Annualized ROI:: ROI expressed as an equivalent yearly rate.
CAGR:: Compound annual growth rate — the smoothed yearly return.
Total return:: Gain including income (dividends/interest), not just price.
Risk-adjusted return:: Return weighed against the risk taken.
Opportunity cost:: The return you gave up on the next-best option.
Benchmark:: A reference return (e.g., the S&P 500) to compare against.
Realized vs unrealized:: Gains booked by selling vs on paper.
ROAS:: Return on ad spend — ROI's marketing cousin (revenue ÷ spend).

Common mistakes to avoid

Ignoring time — comparing a 1-year and a 10-year return with simple ROI.
Leaving out income (dividends, interest, rent) from the final value.
Forgetting fees, taxes, and transaction costs.
Comparing ROI without comparing risk.
Counting non-incremental sales in a marketing ROI.
Using ROI for cash-flow-heavy projects where IRR fits better.
Confusing ROI with profit margin.
Annualizing with the wrong holding period.
Cherry-picking a flattering start/end date.
Ignoring inflation (nominal vs real ROI).

Worked examples

Beginner: Simple ROI

Inputs:: cost $1,000, sold for $1,300
Calculation:: (1,300 − 1,000) ÷ 1,000
Result:: 30%
What it means:: A $300 gain on $1,000 is a 30% return.

Average: Annualized

Inputs:: cost $1,000 → $1,300 over 3 years
Calculation:: (1,300 ÷ 1,000)^(1/3) − 1
Result:: ≈ 9.1%/yr
What it means:: The same 30% total is ~9% per year once you account for the 3-year hold.

Advanced: Marketing ROI

Inputs:: spend $5,000, attributed profit $8,000
Calculation:: (8,000 − 5,000) ÷ 5,000
Result:: 60%
What it means:: Every $1 of spend returned $1.60 of profit — but verify attribution and exclude non-incremental sales.

Regional notes

United States:: Capital-gains tax affects realized ROI; long-term vs short-term rates differ.
India:: Equity LTCG/STCG taxes apply; for SIPs use XIRR rather than simple ROI.
United Kingdom:: Capital Gains Tax and the annual allowance affect net ROI.
Canada:: Capital gains are partially taxable; registered accounts (TFSA/RRSP) change the after-tax ROI.
Australia:: CGT applies, with a discount for assets held over 12 months.

Detailed FAQ

What's a good ROI?

It depends on risk and alternatives. As a yardstick, long-run stock-market returns are ~10%/yr nominal (~7% real); beating that consistently is hard.

Simple vs annualized ROI?

Simple ROI ignores time; annualized expresses it per year so investments of different lengths are comparable.

Should ROI include dividends/interest?

Yes — use total return (price change plus income) for an accurate figure.

ROI vs CAGR — are they the same?

Annualized ROI for a lump sum equals CAGR. For regular contributions, use XIRR instead.

How do I compute marketing ROI?

(profit attributed to the campaign − cost) ÷ cost. Use profit, not revenue, and verify the sales were incremental.

Does ROI account for risk?

No — pair it with a sense of volatility/risk; a high ROI from a risky bet isn't comparable to a steady one.

Should I use nominal or real ROI?

Real (inflation-adjusted) ROI shows the true gain in buying power; subtract inflation from the nominal figure.

Can ROI be negative?

Yes — if the final value is below cost, ROI is negative (a loss).

CAGR calculator Compound interest calculator SIP calculator Inflation calculator Break-even ROAS ROI formula Glossary Finance tools

Compared to alternatives

ROAS vs ROI

ROAS measures revenue per ad dollar; ROI measures profit after all costs.

	ROAS	ROI
Basis	Revenue	Profit (net of costs)
Question	Are ads efficient?	Did the investment pay off?
Break-even	1 / gross margin	0% (any gain)

Bottom line: Optimise campaigns on ROAS, but judge the business on ROI.

ROAS calculator·ROI calculator

CAGR vs ROI

ROI is total return; CAGR is the smoothed annual rate over the holding period.

	CAGR	ROI
Time	Ignores duration	Annualised
Compare across	Same period only	Different durations
Hides	How long it took	Year-to-year volatility

Bottom line: Quote CAGR to compare investments of different lengths fairly.

CAGR calculator·ROI calculator

Related concepts

How ROI connects to the concepts around it.

ROAS:: Revenue earned for every unit spent on advertising.
CAGR:: The smoothed annual rate from a start value to an end value.
Profit Margin:: Profit as a percentage of revenue.
CAC:: The average cost to win one new customer.
LTV:: The total profit expected from a customer over time.
Break-even:: The sales volume where revenue equals total costs.

Investing learning path

A sensible order to learn these concepts.

Compound InterestCAGRROISIPRetirement

Reviewed sources & methodology

Methodology: Exact Formula · Last reviewed June 2026.

U.S. SEC (investor.gov) · Government / Official

Keywords: roi, return, investment.

This is an educational estimate, not financial advice. Rates, rules and figures change — verify the latest with the provider or a qualified advisor before you decide.

Sources: U.S. SEC Investor.gov — return basics

Reviewed by the Free Tools Galaxy editorial team · Updated June 2026 · Calculated privately in your browser.

Frequently asked questions

Is the ROI Calculator free to use?+

Yes. Every tool on Free Tools Galaxy is 100% free, runs in your browser and requires no signup.

How accurate is the ROI Calculator?+

ROI Calculator uses the standard roi formula in double-precision arithmetic, so the same inputs always produce the same result and you can verify any figure by hand. It is an educational estimate — real-world outcomes depend on your actual rates, rules and assumptions.

Do you store my inputs?+

No. The ROI Calculator runs entirely in your browser. Nothing is uploaded or saved to a server.

Can I use the ROI Calculator on mobile?+

Yes — the interface is fully responsive and works on phones, tablets and desktops.

What are common mistakes to avoid?+

The most frequent mistake is mixing units. Double-check your inputs use a single, consistent unit before clicking Calculate.

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Input

How it works

Example

Frequently asked questions

Continue your journey

Complete guide

Quick answers

What is the ROI Calculator?

How the ROI Calculator works

Understanding the inputs

Return on Investment (ROI)

Investment Amount

Component definitions

Benchmark reference

Return on Investment

Typical values

Common interpretation errors

What impacts results most

Key assumptions

What's a typical value?

Annualized vs simple ROI (50% total gain)

ROI vs CAGR vs annualized ROI

Key terms

Common mistakes to avoid

Worked examples

Regional notes

Detailed FAQ

Related

Compared to alternatives

ROAS vs ROI

CAGR vs ROI

Related concepts

Investing learning path

Reviewed sources & methodology

Frequently asked questions

Explore more

Popular tools

Trending in finance

Explore other categories

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