ROI Calculator

Free online ROI calculator. Enter initial investment, final value and holding years to see net profit, simple ROI and annualised ROI (CAGR)—quantify how efficiently any project or investment makes money.

Measure how efficiently your money worked. Enter initial investment, final value and holding years to see net profit, simple ROI and the more time-fair annualised ROI (CAGR).

Net Profit
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Simple ROI
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Annualised ROI (CAGR)
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Understanding ROI and CAGR

What Is ROI?

Return on Investment (ROI) measures how much money an investment produced relative to its cost:

Simple ROI = (Final Value − Initial Investment) / Initial Investment × 100%

The Problem with Simple ROI

Simple ROI ignores time. Earning 100% in 1 year is very different from earning 100% in 10 years. That is why we also compute the annualised ROI, or CAGR—it collapses cumulative return into a per-year compounded growth rate.

CAGR Formula

CAGR = (Final Value / Initial Investment)^(1 / Years) − 1

Example: Invest $10,000, end at $15,000, held 2 years.

  • Simple ROI = 50%
  • Annualised ROI ≈ 22.47% (which means $12,247 after year 1, $15,000 after year 2)

Typical Use Cases

  • Investment comparison: stocks, funds, real estate, art—all on the same yardstick regardless of holding period.
  • Project evaluation: marketing, R&D, M&A efficiency.
  • Business post-mortems: is a business line worth continued investment?

Caveats

  • ROI ignores the timing of cash flows. For irregular inflows/outflows use IRR (internal rate of return).
  • Taxes, inflation and fees are not netted out—they can easily consume 2-3% of annualised return.
  • Short-window high ROI is often noisy; long-window ROI reveals real productivity.

About This Tool

We use finance.js for simple ROI, then apply the geometric-mean formula for CAGR. The years input accepts decimals from 0.1 upward.

Open-Source License: This tool uses finance.js by Essam Al Joubori (MIT) for the underlying ROI function, and Chart.js by Chart.js contributors (MIT) where charts are rendered. Both are bundled locally.

Frequently Asked Questions

Which is more meaningful, simple ROI or annualised ROI?
For cross-period comparisons prefer annualised ROI; within the same holding period simple ROI is enough. Use both when making decisions.
Why does 50% simple ROI turn into only ~22.47% annualised over 2 years?
Because CAGR compounds: (1.2247)² ≈ 1.5, which is 50% cumulative growth.
What if there are dividends or multiple contributions?
Use IRR (internal rate of return) for irregular cash flows. This tool handles the simplified single-in, single-out case.
Can I compute negative ROI?
Yes. When final value is less than initial investment, CAGR is negative and represents the average yearly loss rate.
How do I enter a 6-month holding period?
Enter 0.5 as the years. The geometric-mean formula handles fractional years.
Why is annualised ROI 'fairer'?
It removes the influence of time so investments with different holding periods can be compared on equal footing.
How do I handle taxes and inflation?
Subtract taxes from the final value for after-tax ROI, then divide by (1+inflation)^years for real purchasing-power CAGR.