Return on Investment (ROI) Calculator
ROI = ((return − investment) ÷ investment) × 100
How Return on Investment Is Calculated
Return on Investment (ROI) measures the profitability of an investment relative to its cost, expressed as a percentage. The formula is: ROI = ((final value − initial cost) ÷ initial cost) × 100. If you invest $1,000 and it grows to $1,500, your ROI is (($1,500 − $1,000) ÷ $1,000) × 100 = 50%. A negative ROI indicates a loss.
ROI is one of the most widely used metrics in business and personal finance because it is simple, intuitive, and comparable across different investments. A 20% ROI on a stock purchase, a rental property, or a marketing campaign all use the same formula, making it easy to rank opportunities — though ROI alone does not account for risk, time period, or effort involved.
Time matters when comparing ROIs. A 50% return in one year is excellent; the same 50% over 10 years is mediocre (roughly 4.1% annualized). For time-adjusted comparison, use annualized ROI: ((final value ÷ initial cost)^(1/years) − 1) × 100. Always specify the time frame when discussing ROI to avoid misleading comparisons.
Businesses use ROI to evaluate marketing spend, equipment purchases, and training programs. If a $5,000 advertising campaign generates $15,000 in attributable revenue with $8,000 in product costs, the net gain is $2,000 on a $5,000 investment — a 40% ROI. Personal investors use it to compare stock picks, real estate deals, and side business ventures on equal footing.
Enter the amount you invested and the current or final value to calculate your ROI percentage and absolute profit or loss. Use this for investment tracking, business decision-making, or evaluating whether a purchase delivered value relative to its cost.
Examples
| Example | Result |
|---|---|
| Invest $1,000, final value $1,500 | ROI 50%, profit $500 |
| Invest $5,000, final value $6,200 | ROI 24%, profit $1,200 |
| Invest $10,000, final value $8,500 | ROI -15%, loss $1,500 |
| Cost $800, revenue $1,200 | ROI 50%, profit $400 |
| Invest $2,500, final value $3,750 | ROI 50%, profit $1,250 |
| Invest $20,000, final value $22,400 | ROI 12%, profit $2,400 |
| Cost $3,000, revenue $4,500 | ROI 50%, profit $1,500 |
Frequently asked questions
ROI = ((final value − initial cost) ÷ initial cost) × 100. A $1,000 investment worth $1,500 has a 50% ROI.
It depends on the asset class and time frame. Stock market averages ~10% annually long-term. Real estate often targets 8–12%. Compare against relevant benchmarks.
Basic ROI does not. A 50% return over 1 year differs greatly from 50% over 10 years. Use annualized ROI for time-adjusted comparisons.