ROI Calculator
Calculate Return on Investment (ROI) for your investments and projects
Investment Information
What is Return on Investment (ROI)?
ROI Definition
Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment. This ROI calculator helps you determine how much profit or loss an investment generates relative to its cost.
ROI Formula:
ROI = (Final Value - Initial Investment) ÷ Initial Investment × 100
Annualized ROI = (Final/Initial)^(1/Years) - 1 × 100
Why ROI Matters
ROI is crucial for investment decision-making and performance evaluation. Our ROI calculator helps you compare different investment opportunities and assess their profitability over time.
- •Investment Comparison: Compare different investment options
- •Performance Tracking: Monitor investment success over time
- •Decision Making: Make informed investment choices
- •Risk Assessment: Evaluate returns relative to risk
How to Use the ROI Calculator
Step-by-Step Instructions
- 1.Enter Initial Investment: Input the total amount invested initially. This includes the purchase price, fees, and any additional costs associated with acquiring the investment.
- 2.Input Final Value: Enter the current or expected final value of your investment. This could be the current market value, sale price, or matured value.
- 3.Set Investment Period: Enter how long you held or plan to hold the investment. This helps calculate annualized ROI for better comparison across different time periods.
- 4.Calculate ROI: Click calculate to see your ROI percentage, annualized returns, and detailed performance analysis for your investment.
Calculator Features
Total ROI
Calculates overall return on investment.
Annualized ROI
Standardizes returns for yearly comparison.
Performance Metrics
Shows profit per year and return multiples.
Scenario Analysis
Projects outcomes for different ROI levels.
Frequently Asked Questions (FAQ)
What is considered a good ROI?
A good ROI depends on the investment type and timeframe. Generally, 5-7% annually is considered good for stocks, 8-12% for real estate, and 15%+ for high-risk investments.
How do you calculate ROI manually?
Subtract initial investment from final value, divide by initial investment, then multiply by 100. Formula: ROI = (Final - Initial) ÷ Initial × 100.
What's the difference between ROI and annualized ROI?
Total ROI shows overall return percentage, while annualized ROI standardizes returns to yearly periods, making it easier to compare investments with different timeframes.
How does inflation affect ROI?
Inflation reduces real ROI. If your ROI is 10% but inflation is 3%, your real ROI is only 7%. Always consider inflation when evaluating long-term investments.
What ROI should I expect for stocks?
Historically, stocks average 8-10% annually. Good years may return 20%+, while bad years can have negative returns. Diversification helps manage risk.
How do you calculate ROI for real estate?
Include purchase price, closing costs, improvements, and selling price. Real estate ROI typically ranges from 5-15% annually, depending on location and market conditions.
What's a good ROI for business investments?
Business ROI should exceed 15-20% annually to justify the risk and effort. Startups may target 30%+ ROI, while established businesses may be satisfied with 10-15%.
How do you calculate ROI for marketing campaigns?
ROI = (Revenue from Campaign - Campaign Cost) ÷ Campaign Cost × 100. Good marketing ROI ranges from 300-500% for digital campaigns.
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