ROI Calculator for Any Investment

How to Use Our ROI Calculator

You only need two numbers to calculate your return on investment. For the most accurate result, be sure to include all associated costs.

• Amount Invested ($): Enter the total cost of the investment. This should include the purchase price plus any fees, commissions, or improvement costs (like renovation costs for a house).

• Final Value ($): Enter the amount you received when you sold the investment. For the most precise calculation, you can subtract any selling fees from this amount.

Understanding Your Results

Our calculator gives you two key results that tell the complete story of your investment’s performance: Net Profit and ROI Percentage.

1. Net Profit ($): This is the straightforward dollar amount you earned or lost. It’s the difference between what you got back and what you put in.

2. Return on Investment (ROI %): This powerful percentage puts your net profit into perspective. It tells you how efficiently your money worked for you. An ROI of 45% means you earned 45 cents in profit for every single dollar you invested.

The formula used is:

Why Both Numbers Matter

While the net profit is important, the ROI percentage is crucial for comparing different investments.

As you can see, both investments produced the same $2,500 profit. However, Investment A was far more efficient, generating a 50% ROI compared to just 5% for Investment B.

Frequently Asked Questions

What is a “good” ROI?

A “good” ROI is highly dependent on the type of investment, its risk level, and the time it took to generate the return. There is no single number that fits all scenarios.

• For Stocks: Many investors aim to beat the historical average annual return of the S&P 500, which is around 10%.

• For Real Estate: Returns can vary widely by location. A “good” ROI might be considered 8-12% for a rental property.

• For Business: A marketing campaign might be expected to generate an ROI of 500% (a 5:1 return) to be considered successful.

The best approach is to compare your ROI to relevant industry benchmarks and your own financial goals.

What is the biggest limitation of ROI?

The single biggest limitation of ROI is that it does not account for the passage of time. It tells you how much you made, but not how long it took.

Example: A 25% ROI is fantastic if you earned it in one year. However, if it took you 10 years to get a 25% ROI, your annualized return is actually very low (around 2.2% per year). For investments held over long or varying periods, it’s better to use time-sensitive metrics.

How do I calculate ROI for an investment I still own?

You can calculate an “unrealized” ROI at any time. Instead of the final sale price, simply use the current market value of the asset as the “Final Value” in the calculator. This gives you a snapshot of your performance to date, but remember that this number can change and is not locked in until you actually sell.

Should I include taxes and other costs in my ROI calculation?

Yes, absolutely. For the most accurate measure of your investment’s true performance, you should include all related expenses in the “Amount Invested.” This includes:

• Purchase fees and commissions

• Repair or renovation costs

• Legal fees

• Taxes paid on the profit (capital gains tax)

Failing to include these costs will artificially inflate your ROI.

Can ROI be negative?

Yes. A negative ROI means you lost money on the investment. The final value you received was less than the total amount you invested. For example, if you invest $1,000 and sell for $800, your ROI is -20%, representing a $200 loss.

What’s the difference between ROI, IRR, and CAGR?

• ROI (Return on Investment): A simple, static measure of total profit against total cost. It does not consider time.

• CAGR (Compound Annual Growth Rate): Calculates the average annual growth rate of an investment over a specific period. It is excellent for measuring a lump-sum investment over time. You can calculate it with our [Average Return Calculator (CAGR)].

• IRR (Internal Rate of Return): A more advanced metric used for investments with multiple cash inflows and outflows over time (like a rental property). You can calculate it with our [IRR Calculator].

Take Your Analysis to the Next Level

• Because ROI doesn’t factor in time, see your investment’s year-over-year performance with our Average Return Calculator (CAGR).

• If your investment involves complex cash flows (e.g., a business or rental property), get a more accurate performance metric with our IRR Calculator.