ROI Calculator

Return on Investment (ROI) measures how much profit or loss an investment generated relative to its cost. Formula: ROI = (Final Value − Initial Investment) / Initial Investment × 100. A $10,000 investment that grows to $13,500 returns ($13,500 − $10,000) / $10,000 × 100 = 35% ROI.

Annualized ROI — also called Compound Annual Growth Rate (CAGR) — converts total return into a per-year figure. Formula: CAGR = (Final/Initial)^(1/years) − 1. A 35% total ROI over 3 years equals (1.35)^(1/3) − 1 = 10.6% per year. CAGR lets you compare investments held for different durations on equal footing.

It depends on the asset class and timeframe. Historically: S&P 500 stocks average ~10% annualized, real estate ~8–10%, bonds ~4–5%, savings accounts 1–5%. A "good" ROI exceeds both inflation (~3%) and the opportunity cost of alternative investments. For stocks, beating the S&P 500 index is the common benchmark.

ROI measures return relative to the cost of the investment. Profit margin measures profit relative to revenue. A business might earn $10 profit on $100 revenue (10% margin) but invested $50 in inventory, giving 20% ROI. Both metrics are useful but measure different things.

Yes. A negative ROI means the investment lost value. If you invest $10,000 and it falls to $8,000, ROI = (8,000 − 10,000) / 10,000 × 100 = −20%. Negative ROI is a loss. The annualized version of a negative ROI still uses the same CAGR formula and will also be negative.