ROI (Return on Investment) Calculator 2025
Calculate ROI, annualized return, and investment profit. Evaluate stock, real estate, and business investments.
ROI (Return on Investment) Calculator 2025
Introduction
ROI (Return on Investment) measures how much profit you made relative to what you invested. It's the universal metric for comparing investments.
Formula: ROI = (Gain - Cost) / Cost × 100
Example Calculations
Example 1: Stock Investment
- Bought: $5,000
- Sold: $6,500
- ROI: ($6,500 - $5,000) / $5,000 × 100 = 30%
Example 2: Real Estate
- Purchase: $300,000
- Expenses: $50,000 (repairs, holding costs)
- Sale Price: $420,000
- ROI: ($420,000 - $350,000) / $350,000 × 100 = 20%
Annualized ROI
To compare investments held for different timeframes, annualize the ROI.
Formula: Annualized ROI = [(1 + ROI)^(1/Years)] - 1 × 100
Example: 30% ROI over 3 years → Annualized = 9.1% per year
What's a Good ROI?
| Investment | Typical ROI |
|---|---|
| S\u0026P 500 (long-term) | 10% annually |
| Real Estate Rental | 8-12% annually |
| High-Yield Savings | 1-5% annually |
| Business | Highly variable (negative to 100%+) |
FAQ
Q: Does ROI account for risk? A: No. A 20% ROI on a volatile stock is riskier than 8% on a stable bond. Consider risk-adjusted returns.
Q: Should I include dividends in ROI? A: Yes. Total return = Price gain + Income (dividends or rent).
Related Tools
- Investment Return Calculator: /calculator/05-investment-return-calculator
Conclusion
ROI is your report card for every financial decision. Use this calculator to ensure your money is working as hard as it should.