Frequently Asked Questions
Everything you need to know about the ROI Calculator.
What is ROI?
ROI (return on investment) measures the gain or loss on an investment relative to its cost, calculated as (Final Value − Initial Investment) ÷ Initial Investment × 100.
What is annualized return?
Annualized return (CAGR) converts a total return over any holding period into an equivalent yearly rate, using ((Final ÷ Initial)^(1/years) − 1) × 100. It lets you fairly compare investments held for different lengths of time.
Why is annualized return lower than total ROI?
Because it spreads the total gain across the entire holding period. A 40% total return over 4 years is roughly 8.8% per year, not 40% per year.
What counts as the 'final value'?
The total amount your investment is worth now, or what you sold it for — including any dividends or income if you want a total-return figure, though this calculator doesn't add those automatically.
Can ROI be negative?
Yes. If the final value is less than the initial investment, both the net gain and ROI percentage will be negative, representing a loss.
Do I need to enter a holding period?
No — it's optional. Leave it blank to see just the total ROI and net gain. Enter it to also see the annualized return.
Does ROI account for inflation?
No. This calculator shows nominal returns. To find a real (inflation-adjusted) return, subtract the inflation rate from the annualized return, or use a dedicated inflation calculator.
Is a higher ROI always better?
Not necessarily — a higher ROI over a much longer period can be a worse annualized return than a smaller ROI achieved quickly. Compare annualized returns for a fair comparison.
Can this calculator be used for real estate or business investments?
Yes — it works for any investment where you know the amount put in and the amount it's worth now or was sold for, including stocks, real estate, and business ventures.
Is this calculator free to use?
Yes, completely free with no sign-up, and it runs entirely in your browser.