ROI Calculator
Enter your initial investment, final value, and the time period held to calculate your total ROI percentage and, for multi-year holds, your annualized (compound annual growth) rate of return.
How the ROI formula works
Total and annualized ROI:
Total ROI% = ((Final value − Initial investment) / Initial investment) × 100 Annualized ROI% = ( (Final value / Initial investment)^(1/years) − 1 ) × 100
Step-by-step calculation
- Subtract the initial investment from the final value to find total gain (or loss).
- Divide that gain by the initial investment and multiply by 100 for total ROI.
- For a multi-year hold, take the ratio of final to initial value, raise it to the power of 1/years, subtract 1, and multiply by 100 for the annualized rate.
Worked example
An investment of $10,000 grows to $16,000 over 4 years: Total ROI = (16,000 − 10,000)/10,000 × 100 = 60%. Annualized ROI = (16,000/10,000)^(1/4) − 1 ≈ 12.5% per year.
Frequently asked questions
Why is annualized ROI usually a smaller number than total ROI?
Total ROI shows the full gain over the entire holding period, while annualized ROI spreads that same gain evenly (in compound terms) across each year, which is almost always a smaller per-year figure once the hold spans more than one year.
Does this account for additional contributions over time?
No — this calculator assumes a single initial investment and a single final value. For a series of contributions over time, a more detailed cash-flow (IRR) calculation would be needed.
Should ROI include fees and taxes?
For an accurate picture of your real return, subtract any transaction fees, management fees, or taxes from the final value first — otherwise your ROI will look better than what you actually kept.