Return on Investment (ROI) measures the profitability of an investment as a percentage of the initial cost. It is one of the most widely used metrics for evaluating the efficiency of an investment or comparing the returns of different investments. This calculator also shows the annualised ROI, which accounts for the time period of the investment.

1. Enter the initial investment cost.
2. Enter the final value (what the investment is worth now, or what you received).
3. Enter the investment period in years (for annualised ROI).
4. Click Calculate.

Initial cost: $10,000, final value: $13,500, period: 2 years.
Net return: $3,500 | ROI: 35% | Annualised ROI: 16.2%

ROI tells you the total return as a percentage of the initial cost. Annualised ROI (CAGR) tells you the equivalent annual growth rate — useful for comparing investments held for different periods. A 35% ROI over 2 years is equivalent to approximately 16.2% per year compounded.

• Comparing ROI figures without accounting for the time period — a 50% ROI over 10 years is much less impressive than 50% over 1 year.
• Ignoring costs such as fees, taxes and inflation when calculating net return.

What is a good ROI?

It depends on the investment type and time period. Stock market investments historically return 7–10% per year. Real estate varies widely. A "good" ROI is one that exceeds the cost of capital and meets your financial goals.

What is the difference between ROI and CAGR?

ROI is the total return over the entire period. CAGR (Compound Annual Growth Rate) is the annualised equivalent — the constant annual rate that would produce the same total return. This calculator shows both.