ROI Calculator (Return on Investment)
This ROI calculator works out the return on investment as a percentage from just two numbers: how much you put in and how much it is worth now. Enter your initial investment and the final value, and it instantly returns the ROI percentage and the net gain in currency. ROI is the most widely used measure of profitability because it expresses the result of an investment relative to its cost, which makes very different opportunities directly comparable on a single scale.
ROI
Net gain
ROI does not take time into account: the same figure could correspond to one year or to ten. To compare investments with different durations, use the annualized ROI.
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How it works
The calculator uses the standard ROI formula ROI = (final value − initial investment) / initial investment × 100. First it finds the net gain by subtracting the amount you invested from the final value; this is your profit in currency, which can be negative if the investment lost money. Then it divides that gain by the initial investment and multiplies by 100 to express it as a percentage of the capital you committed. A positive ROI means you ended up with more than you put in, while a negative ROI means you ended up with less. Because the result is a ratio, an ROI of 50% means the same relative return whether you invested 1,000 or 1,000,000.
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Preguntas frecuentes
- What is ROI?
- ROI, or return on investment, is a measure of how profitable an investment is relative to its cost. It is expressed as a percentage and calculated as the net gain divided by the amount invested, times 100. A positive ROI means the investment made money and a negative ROI means it lost money.
- What is a good ROI?
- What counts as a good ROI depends heavily on the type of investment and the risk involved. As a rough reference, the stock market has historically returned around 7–10% per year on average, so a long-term annual ROI in that range is often considered solid. Higher returns usually come with higher risk. Because ROI ignores time, always check over what period it was earned before judging whether it is good.
- What is the difference between ROI and net gain?
- The net gain is the profit in currency: final value minus the amount invested. ROI is that same gain expressed as a percentage of what you invested. Two investments can have the same net gain of 500 but very different ROIs: 500 on a 1,000 investment is 50%, while 500 on a 10,000 investment is only 5%. ROI is what lets you compare investments of different sizes fairly.
- What is the ROI formula?
- ROI = (final value − initial investment) / initial investment × 100. For example, if you invest 1,000 and it grows to 1,500, the net gain is 500 and the ROI is 500 / 1,000 × 100 = 50%. If the final value were below the investment, the ROI would be negative.
- Does ROI take time into account?
- No. Plain ROI measures the total return over the whole holding period without regard to how long that period was. A 50% ROI earned in one year is far better than the same 50% earned over ten years. To compare investments held for different lengths of time, you should use the annualized ROI, which converts the total return into an equivalent yearly rate.