Calculate simple and annualized return on investment. Compare multiple investments side by side. Includes modes for stocks, real estate, and marketing campaigns.
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💡 Annualized ROI (CAGR) lets you compare investments held for different durations on equal footing.
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💡 Compare up to 5 investments by total ROI and annualized return side by side.
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🏆 Ranked by Annualized ROI
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What Is ROI and How Is It Calculated?
Also searched as: roi calculator free | return on investment calculator | how to calculate roi | business roi calculator Optimized for US users with American units and terminology.
Return on Investment (ROI) measures the efficiency and profitability of an investment. The basic formula is: ROI = (Net Profit ÷ Cost of Investment) × 100. Net profit is simply the final value minus the initial cost. A 50% ROI means you gained 50 cents for every dollar invested.
ROI is easy to calculate but has one major limitation: it ignores time. A 50% ROI over 1 year is very different from a 50% ROI over 10 years. That's why annualized ROI (CAGR) is often more useful for comparing investments held for different durations.
Simple ROI vs Annualized ROI (CAGR)
Simple ROI totals the gain over the entire period. Annualized ROI (Compound Annual Growth Rate) breaks it down to a per-year rate assuming compounding. A $10,000 investment that grows to $18,500 over 5 years has a simple ROI of 85% but a CAGR of only 13.1% per year — because compounding is at work.
Real Estate ROI: Cash-on-Cash vs Total Return
Real estate has two main ROI metrics. Cash-on-cash return measures annual rental income against your cash invested (down payment). The cap rate measures the property's income relative to its total value — useful for comparing properties regardless of financing. Total return includes both rental income and property appreciation over your holding period.
Use the ROI Calculator above — enter your values and get instant results. This free online tool calculates how to calculate return on investment without any download or signup required. Results update in real time as you type.
Use the ROI Calculator above — enter your values and get instant results. This free online tool calculates what is a good roi percentage without any download or signup required. Results update in real time as you type.
It depends on the asset class and risk. S&P 500 has historically averaged ~10% annually. Real estate typically returns 8-12% total (rental + appreciation). A "good" ROI is one that exceeds your next best alternative (opportunity cost) with acceptable risk.
CAGR (Compound Annual Growth Rate) is the rate at which an investment would have grown if it grew at a steady rate annually. Formula: CAGR = (Ending Value / Beginning Value)^(1/Years) − 1. It's the best metric for comparing investments held over different time periods.
Cash-on-cash return = Annual net cash flow ÷ Total cash invested. If you put $70,000 down and receive $4,800/year in net rental income, your cash-on-cash return is 6.9%. It only counts cash — not appreciation — so it's a conservative real-world cash yield measure.
Nominal ROI doesn't account for inflation. Real ROI = ((1 + Nominal ROI) / (1 + Inflation Rate)) − 1. At 3% inflation, a 10% nominal annual return is only a 6.8% real return. Over long periods, this distinction is significant — inflation erodes purchasing power substantially.