ROI Calculator
Calculate return on investment, net profit and annualised ROI, including extra costs and any income received while you held the investment.
Tool guide
What this tool does
The ROI Calculator measures how much an investment earned relative to what it cost. Add fees, taxes or upkeep and any dividends or rent received, then set a holding period in years or between two dates to see the annualised return for fair comparisons.
Return on investment expresses profit as a percentage of what you put in. It is used for shares and property, but also for marketing campaigns, equipment purchases and training programmes: anything where money spent should bring more money back. A 35% ROI sounds strong, yet if it took three years to earn, the yearly return is about 10.5%, so time must be taken into account when comparing options.
The calculator computes ROI = (amount returned + income − investment − costs) ÷ (investment + costs) × 100. Additional costs cover brokerage, stamp duty, repairs or advertising fees, and income covers dividends, interest or rent received along the way. With a holding period it also reports annualised ROI = (1 + ROI)^(1/years) − 1, the compound yearly rate equivalent to the total return.
How to use ROI Calculator
- Choose a currency and enter the amount invested.
- Enter the amount returned, which is the sale price or current value.
- Add any additional costs such as fees, taxes or maintenance.
- Add any income received during the holding period, such as dividends or rent.
- Choose the holding period type and enter the years or the buy and sell dates.
- Read the ROI, net profit and annualised ROI.
Tips for better results
- Always compare annualised figures; total ROI favours investments held longer.
- Include every cost, including taxes on gains, for an honest view of the return.
- For marketing, use gross profit generated rather than revenue as the amount returned.
Common use cases
- Evaluating the return on a property after rent and maintenance.
- Measuring the payback of an advertising campaign.
- Comparing a share sale with a fixed deposit held for the same time.
- Deciding whether a machine or software purchase paid for itself.
Common mistakes to avoid
- Leaving out brokerage, stamp duty or repair costs, which inflates ROI.
- Comparing a one-year ROI with a five-year ROI without annualising.
- Treating revenue as profit when measuring business ROI.
Frequently asked questions
What is the ROI formula?
ROI = net profit ÷ total cost × 100, where net profit is the amount returned plus income minus the investment and any extra costs.
What is annualised ROI?
It converts a total return into a yearly compound rate: (1 + ROI)^(1 ÷ years) − 1. A 35% return over three years is about 10.52% a year.
Is ROI the same as CAGR?
Annualised ROI and CAGR use the same compounding idea. ROI additionally lets you include costs and income received during the period.
What is a good ROI?
It depends on risk and time. Compare it with what a low-risk option, such as a fixed deposit, would have earned over the same period.
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