What ROI tells you
Return on investment (ROI) measures how much you gained (or lost) relative to what you put in. It's the simplest way to judge whether an investment, project, or purchase paid off. Enter the amount invested and the final value, and this calculator shows your net profit and total ROI percentage.
Add a holding period and it also gives the annualized ROI — essential for comparing investments held for different lengths of time.
Total vs annualized ROI
A 50% total return sounds great — but over 10 years it's only about 4% a year, while the same 50% in 2 years is roughly 22% a year. Total ROI ignores time; annualized ROI accounts for it, which is why it's the fairer number when comparing opportunities.
Where to use it
- Investments: stocks, funds, crypto, or real estate deals.
- Business: marketing campaigns, equipment, or new hires.
- Big purchases: anything you expect to generate a return.