What's a good ROI?
Depends on the investment type and risk. Stock market averages ~10% annually. Real estate 8-12%. Venture capital may target 25%+. Compare with similar investments and consider risk.
Calculator
Enter your values
Current or ending value including all distributions
Analysis
Interpretation of the current calculator output
Enter values to see detailed analysis and insights.
How to Use
Step-by-step instructions
- 1Enter your initial investment amount
- 2Input the current or final value of the investment
- 3Specify the time period in years
- 4Review the total ROI and annualized ROI percentages
- 5Compare with alternative investments or benchmarks
Return on Investment (ROI)
ROI measures the profitability of an investment as a percentage of the initial cost. Annualized ROI accounts for the time period to enable fair comparisons.
ROI = (Final Value - Initial Investment) ÷ Initial Investment × 100%
Annualized ROI = [(Final ÷ Initial)^(1/Years) - 1] × 100%Variables:
Final ValueCurrent or ending value of the investmentInitial InvestmentOriginal amount investedNet ProfitFinal Value - Initial InvestmentYearsInvestment time periodExample
Stock Investment Example
Inputs:
Initial Investment:$10,000
Final Value:$15,000
Time Period:1 year
Steps:
- 1.Net Profit = $15,000 - $10,000 = $5,000
- 2.ROI = ($5,000 ÷ $10,000) × 100 = 50%
- 3.Annualized ROI = [($15,000 ÷ $10,000)^(1/1) - 1] × 100 = 50%
- 4.Return Multiple = $15,000 ÷ $10,000 = 1.5×
Result:
50% return on investment in 1 year
Frequently Asked Questions
Why use annualized ROI?
Annualized ROI allows fair comparison of investments held for different time periods. A 50% return in 1 year is better than 50% over 5 years.
Does ROI include dividends or distributions?
Yes, ROI should include all returns from the investment - capital gains, dividends, interest, rental income, etc. Use final value inclusive of all distributions.