ROI Calculator

Calculate return on investment from an initial amount and final value, with optional annualized return when a period is provided.

What is return on investment?

Return on investment (ROI) measures total gain or loss relative to the amount invested. When a period in years is provided, the Calculator also shows an annualized return using the same compounding convention as CAGR.

Formula

ROI (%) = ((Final value − Initial investment) ÷ Initial investment) × 100. Gain or loss = Final value − Initial investment. When years are provided and both values are positive, Annualized return (%) = ((Final value ÷ Initial investment) ^ (1 ÷ Years) − 1) × 100.

Worked example

An investment of 1,000 that grows to 1,250 has a gain of 250 and ROI of 25%. If that growth happened over 5 years with positive values throughout, the annualized return is about 4.56%.

Assumptions and limitations

The Calculator assumes a single initial investment and a single final value. It does not model intermediate cash flows, fees, taxes, leverage, or changing valuations within the period. Annualized return is shown only when a positive period in years is entered and both values are positive.

Common questions

Is ROI the same as CAGR?

Total ROI over a period is not the same as CAGR unless the period is exactly one year. When years are provided, annualized return uses the CAGR formula. Why must the initial investment be positive? ROI divides by the initial investment, so zero or negative initial amounts would not produce a conventional ROI in this model. Can final value be zero? Yes. That represents a complete loss and produces −100% ROI.

Methodology

The Calculator uses exact decimal arithmetic for validation and calculation. ROI and gain or loss are always shown. Annualized return is computed only when years are provided and both values are positive, then all displayed values are rounded for presentation.