Free ROI Calculator
Calculate the return on investment (ROI) and annualized ROI from an initial and final investment value. Free. No signup required.
- Initial Investment$10,000.00
- Final Value$14,000.00
Your investment grew from $10,000.00 to $14,000.00 — a gain of 40%.
- ROI40%
- Annualized ROI11.87%
ƒShow your work
ROI = (Final − Initial) / Initial × 100
- 1ROI = ($14,000.00 − $10,000.00) / $10,000.00 × 100 = 40%
About the Free ROI Calculator
Return on investment answers a simple question — how much did I gain relative to what I put in — but the raw percentage alone can be misleading without one more piece of context: how long it took. A 40% return sounds identical whether it happened in six months or six years, and those two outcomes are nowhere near equally good. This calculator gives both the raw ROI and, when you provide a holding period, the annualized figure that actually makes different investments comparable.
It's used to evaluate almost anything with a defined start and end value: a stock position, a real estate flip, a small business investment, or even a large one-off purchase like a car or equipment being judged by resale or savings generated — anywhere there's a clear initial cost and a final value to compare it against.
Investment amounts and returns are private financial details by nature — this calculator runs the entire comparison in your browser, so you can evaluate a real deal or a real portfolio position without any of those numbers being sent anywhere.
How it’s calculated
Raw ROI is a simple ratio: (final value − initial value) ÷ initial value, expressed as a percentage — it tells you the total return over the entire holding period, however long that was. Annualized ROI answers a different question: what constant yearly rate, compounding every year, would produce the same result over that same period? It's calculated as (final ÷ initial)^(1/years) − 1, which is the same math behind CAGR (compound annual growth rate) — and it's the number that lets you fairly compare a two-year investment against a ten-year one.
Frequently asked questions
What counts as a good ROI on an investment?
It depends entirely on the asset type, risk level, and time horizon — there's no single benchmark. A long-run diversified stock portfolio commonly returns somewhere around 7-10% annualized before inflation, but real estate, small business, and other investments carry different typical ranges and different risk.
Why does annualized ROI matter if I already know the total ROI?
Total ROI doesn't account for how long the money was tied up, so it can't be compared fairly across investments with different holding periods. A 50% total return over 10 years is a much weaker result than 50% over 2 years, even though the raw ROI number looks identical.
Does ROI account for taxes, fees, or inflation?
No — this calculates a straightforward return based on the initial and final values you enter. Capital gains taxes, transaction or management fees, and inflation all reduce the real, spendable return and aren't factored in automatically, so keep that in mind when comparing to other goals.
How is ROI different from CAGR?
ROI (as a raw figure) measures total return over the whole period regardless of length. CAGR — which is what the annualized ROI figure here calculates — smooths that same total return into an equivalent constant yearly rate, making it the more useful number for comparing investments held for different lengths of time.
Can ROI be negative, and what does that mean?
Yes — a negative ROI simply means the final value was lower than the initial investment, i.e. a loss. An ROI of -25% means you'd have 75% of your original investment left if you sold at that final value.
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