ROI Calculator
Measure the return on an investment, both total and annualized.
Your details
- Annualized ROI
- 14.47%
- Net profit
- $5,000.00
Formula
Total ROI = (final − initial) ÷ initial. Annualized ROI = (final ÷ initial)^(1/years) − 1.
How it works
Total ROI compares your gain to what you put in. Annualized ROI then spreads that return across the years you held the investment, so you can fairly compare opportunities of different lengths.
Frequently asked questions
What is a good ROI?⌄
It depends on risk and time. Beating a safe savings rate and staying ahead of inflation is the baseline; the US stock market has historically averaged around 10% a year before inflation.
Why does annualized ROI matter?⌄
A 20% total return is excellent in one year but poor over ten. Annualizing puts returns on the same yearly footing so comparisons are fair.
Does ROI account for inflation?⌄
Not by itself. A 5% return in a year of 6% inflation actually loses purchasing power, so judge returns in real, after-inflation terms.
Sources & methodology
- •U.S. SEC — investing basics — SEC
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