ROI Calculator

How to Use This ROI Calculator

"I doubled my money" means different things over six months vs six years. ROI answers the raw gain question; annualized ROI puts unlike holding periods on the same clock—my go-to when comparing a house flip to a index fund hold.

• Enter amount invested. Total cash put in at the start, including out-of-pocket costs if relevant.
• Enter amount returned. Proceeds at exit—sale price, redemption value, or current market value.
• Set holding period. Enter years, months, or both for annualized ROI.
• Press Calculate. Review total ROI %, annualized ROI %, and dollar gain or loss.

If you made interim contributions, use the IRR Calculator. For start/end balance CAGR, see the Average Return Calculator.

ROI Formulas and Practical Applications

ROI is the simplest performance metric: how many cents of profit per dollar invested. Annualized ROI rescales that to a per-year rate so you can compare a 2-year flip against a 10-year portfolio hold.

Total ROI

ROI = (Returned − Invested) / Invested × 100%

Invest $12,000, sell for $15,600 → ROI = 30% ($3,600 gain).

Annualized ROI

Annualized ROI = (Returned / Invested)^1/t − 1

That same 30% total return over 2 years annualizes to about 14.0%/year—not 15%, because compounding matters even in the conversion.

Frequently Asked Questions

How is ROI calculated?

ROI equals (Amount Returned minus Amount Invested) divided by Amount Invested, expressed as a percentage.

What is annualized ROI?

Annualized ROI converts total return into an equivalent constant yearly rate based on holding period in years.

Can I enter years and months for holding period?

Yes. Years and months combine into total time for annualized ROI calculation.

Does ROI include fees and taxes?

Only if you use net amounts after fees and taxes in the invested and returned fields.

When should I use ROI vs IRR?

ROI works for simple buy-and-sell comparisons. IRR is better when interim deposits or withdrawals occurred during the holding period.