ROI Calculator
Return on investment (ROI) measures the profitability of an investment as a percentage of its cost, and it's one of the simplest and most widely used metrics for judging whether an investment — in a project, a marketing campaign, a piece of equipment, or a financial asset — paid off. This calculator computes total ROI (net gain divided by cost) and annualized ROI, which normalizes returns over time so you can compare investments held for different durations on a fair basis. Enter the total investment cost, the total return or final value, and the time period in years, and the calculator returns your total ROI and annualized ROI, plus the net gain or loss in dollars. Total ROI shows the overall percentage return, while annualized ROI converts it to a per-year rate, so an investment held for 10 years can be compared against one held for 2. What counts as a good ROI depends on risk and alternatives: for low-risk investments, 5% to 8% may suffice, while for riskier ventures investors often seek 15% or more, so compare against your cost of capital and the risk you took. ROI is simple and widely used, but it has limitations: it excludes the time value of money and risk, so for a more thorough analysis use Net Present Value (NPV) or Internal Rate of Return (IRR), which account for when cash flows occur. For thorough analysis, include opportunity cost by comparing your ROI against what you'd earn in your next-best alternative, to see if the investment is truly worthwhile. ROI can be negative if the return is less than the cost, indicating a loss, which the calculator shows clearly. Use this calculator for a quick profitability measure on any investment, to annualize returns for fair comparison, and to evaluate projects, marketing spend, and financial assets.
ROI Calculator
Calculate total and annualized return on investment for any project.
Total ROI
-85.0%
Loss
Net gain / loss
-$8,500
Annualized return
-61.3%
ROI measures total return as a percentage of cost. Annualized ROI normalizes returns over time so you can compare investments of different durations. It excludes risk and the time value of money.
How to Use This Calculator
- 1Enter the total investment cost.
- 2Enter the total return or final value.
- 3Enter the time period in years.
- 4Read your total and annualized ROI.
Why It Helps
- ✓Quick profitability measure for any investment.
- ✓Annualizes returns for fair comparison.
- ✓Works for projects, marketing, and assets.
- ✓Shows gain or loss clearly.
About This Calculator
Return on investment (ROI) measures the profitability of an investment as a percentage of its cost, and it's one of the simplest and most widely used metrics for judging whether an investment — in a project, a marketing campaign, a piece of equipment, or a financial asset — paid off. This calculator computes total ROI (net gain divided by cost) and annualized ROI, which normalizes returns over time so you can compare investments held for different durations on a fair basis. Enter the total investment cost, the total return or final value, and the time period in years, and the calculator returns your total ROI and annualized ROI, plus the net gain or loss in dollars. Total ROI shows the overall percentage return, while annualized ROI converts it to a per-year rate, so an investment held for 10 years can be compared against one held for 2. What counts as a good ROI depends on risk and alternatives: for low-risk investments, 5% to 8% may suffice, while for riskier ventures investors often seek 15% or more, so compare against your cost of capital and the risk you took. ROI is simple and widely used, but it has limitations: it excludes the time value of money and risk, so for a more thorough analysis use Net Present Value (NPV) or Internal Rate of Return (IRR), which account for when cash flows occur. For thorough analysis, include opportunity cost by comparing your ROI against what you'd earn in your next-best alternative, to see if the investment is truly worthwhile. ROI can be negative if the return is less than the cost, indicating a loss, which the calculator shows clearly. Use this calculator for a quick profitability measure on any investment, to annualize returns for fair comparison, and to evaluate projects, marketing spend, and financial assets.
Disclaimer: This calculator provides estimates for educational purposes only and does not constitute financial, tax, or investment advice. Results depend on assumptions that may not reflect your actual situation.
Frequently Asked Questions
What is a good ROI?
It depends on risk and alternatives. For low-risk investments, 5-8% may suffice; for riskier ventures, investors often seek 15% or more. Compare against your cost of capital.
How is annualized ROI different from total ROI?
Total ROI shows the overall percentage return. Annualized ROI converts it to a per-year rate, so you can compare investments held for different lengths of time.
Does ROI account for the time value of money?
No. ROI ignores when cash flows occur. For that, use Net Present Value (NPV) or Internal Rate of Return (IRR), which account for timing.
Should I include opportunity cost in ROI?
For thorough analysis, yes. Compare your ROI against what you'd earn in your next-best alternative to see if the investment is truly worthwhile.
Can ROI be negative?
Yes. If the return is less than the cost, ROI is negative, indicating a loss. The calculator shows this as a loss.
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Written by
James MitchellSenior Financial Analyst & Personal Finance Expert
Certified Financial Planner (CFP) • MBA in Finance, University of Chicago Booth School of Business