Return on Investment Calculator
Return on investment, almost always shortened to ROI, is the simplest way to judge whether an investment paid off. This calculator works from the net-profit angle: it first finds your net profit, the amount you got back minus the amount you put in, then expresses that profit as a percentage of what you invested. So putting in 10,000 and getting back 13,000 is a 3,000 net profit and a 30 percent ROI. The plain ROI figure ignores how long your money was locked away, which is why this tool also reports annualized ROI, the equivalent compound yearly rate over your holding period. That distinction matters: a 30 percent total return earned in one year is far stronger than the same 30 percent stretched across five, and annualizing puts investments of different lengths on a fair footing. Enter the amount invested, the amount returned and the number of years held to see net profit, ROI and annualized ROI together. Bear in mind that simple ROI ignores fees, taxes, inflation and the timing of cash flows, concepts the US Securities and Exchange Commission explains on its Investor.gov education site. Every number here is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the default inputs.
Return on investment is net profit / amount invested. Turning $10,000 into $13,000 is a $3,000 profit, a 30.00% ROI; over one year the annualized ROI is also 30.00%.
Return on investment formula
net profit = amount returned - amount invested
ROI (%) = net profit / amount invested x 100
annualized ROI (%) = ((amount returned / amount invested)^(1 / years) - 1) x 100
years = holding period of the investment
Subtract the amount invested from the amount returned to get net profit, then divide that profit by the amount invested for the simple ROI. The annualized version raises the total growth multiple to the power of one divided by the number of years, which converts the whole-period return into a compound yearly rate.
Worked example
You invest 10,000, receive 13,000 back, and held the investment for 1 year.
- Net profit = 13,000 - 10,000 = 3,000
- ROI = 3,000 / 10,000 = 0.30, so 30.00%
- Annualized ROI = ((13,000 / 10,000)^(1 / 1) - 1) x 100 = (1.30 - 1) x 100 = 30.00%
The investment made a 3,000 net profit, a 30.00% ROI, and a 30.00% annualized ROI (the same, because it was held for exactly one year). These are the calculator's default inputs, so the result above matches the widget exactly.
Annualized ROI for a 30% total return
A 30% total return (10,000 invested, 13,000 returned) annualizes very differently by holding period.
| Holding period | Annualized ROI |
|---|---|
| 1 year | 30.00% |
| 2 years | 14.02% |
| 3 years | 9.14% |
| 5 years | 5.39% |
| 10 years | 2.66% |
Investment return concepts: US Securities and Exchange Commission, Investor.gov.
Return on investment calculator: frequently asked questions
What is return on investment (ROI)?
Return on investment measures the profit made on an investment relative to its cost, as a percentage. You take the net profit, which is the amount returned minus the amount invested, and divide it by the amount invested, then multiply by 100. An ROI of 30 percent means you earned 30 cents of profit for every dollar you put in, over the whole holding period.
What is annualized ROI and why does it matter?
Annualized ROI converts the total return into an equivalent yearly rate, accounting for how long the money was invested. A 30 percent total return over one year is far better than the same 30 percent over five years. Annualized ROI lets you compare investments held for different lengths of time on a fair, like-for-like basis using a compound annual growth calculation.
How is annualized ROI calculated?
Annualized ROI = ((amount returned divided by amount invested) raised to the power of 1 divided by the number of years, minus 1) times 100. This is the compound annual growth rate. For a holding period of exactly one year, annualized ROI equals the simple ROI, because raising a value to the power of 1 leaves it unchanged.
What does ROI leave out?
Simple ROI does not account for the timing of cash flows within the holding period, taxes, fees, or the risk taken to earn the return. It also ignores inflation, so a positive ROI can still lose purchasing power. For decisions involving cash flows across many periods, net present value or internal rate of return give a fuller picture.
What is the ROI formula?
Net profit = amount returned minus amount invested. ROI = net profit divided by amount invested, times 100. For example, investing 10,000 and getting back 13,000 gives a net profit of 3,000 and an ROI of 30 percent. The annualized version adjusts that figure for the number of years the money was held.
Official sources
- Investment returns and how to compare them: US Securities and Exchange Commission, Investor.gov. As at 24 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 24 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.