Calculate ROI, net profit, and annualized returns for any investment.
This return on investment calculator helps you measure the profitability of any investment. Enter your initial investment amount and the final value to instantly see your total ROI as a percentage and net profit in dollars. Optionally add a time period to calculate annualized returns, which makes it easy to compare investments of different durations on a level playing field.
For stock market investments, ROI helps you evaluate how well your portfolio is performing. If you bought shares worth $10,000 and they are now worth $15,000, your ROI is 50 percent. But the annualized figure is what truly matters for comparison. A 50 percent return over one year is exceptional, while the same return over ten years is roughly 4.1 percent annually, which barely beats inflation. Always use annualized ROI when comparing investments held for different lengths of time.
Real estate investors use ROI to evaluate property purchases. When calculating real estate ROI, your initial investment should include the down payment, closing costs, and any renovation expenses. The final value should reflect the current market value or sale price. Remember to factor in ongoing costs like property taxes, insurance, and maintenance. A typical rental property ROI ranges from 8 to 12 percent annually when factoring in both appreciation and rental income.
Businesses use ROI to evaluate marketing campaigns, equipment purchases, new hires, and expansion plans. A marketing campaign that costs $5,000 and generates $20,000 in revenue has a 300 percent ROI. However, smart decision-makers also consider opportunity cost, or what they could have earned by investing the same money elsewhere.
Planning for retirement? Try the retirement calculator. Want to see compound growth? Use the compound interest calculator.