ROI Calculator
An ROI calculator works out the return on an investment from what you put in and what you got back: the profit, the ROI as a percentage, and, when you give the holding period, the annualised return. Annualisation is the part most simple calculators skip and the part that makes two investments comparable.
Last reviewed by the Radiatus Cloud team
ROI Calculator
Calculate the Return on Investment (ROI) for any investment.
ROI Result
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The two numbers
Simple ROI is profit divided by amount invested, as a percentage: put in 1,000, get back 1,500, and ROI is 50 percent. That figure answers how much you gained but says nothing about how long it took, which is why it cannot compare a 50 percent return earned in six months with one earned over five years.
Why annualised return matters
Give the calculator the holding period and it computes the compound annual growth rate: the constant yearly rate that would turn the amount invested into the amount returned over that time. A 50 percent total return over six months is about 125 percent annualised; the same 50 percent over five years is about 8.4 percent annualised. The raw ROI is identical; the annualised figure shows they are completely different investments. Always compare investments on annualised return, never on total ROI, unless the periods are the same.
Worked example
| Invested | Returned | Period | ROI | Annualised |
|---|---|---|---|---|
| $1,000 | $1,500 | 6 months | 50% | ~125% |
| $1,000 | $1,500 | 5 years | 50% | ~8.4% |
| $10,000 | $9,000 | 1 year | -10% | -10% |
What it does not account for
It uses the two cash figures you enter, so it ignores interim cash flows (dividends, additional contributions), taxes, fees and inflation. For an investment with cash flows along the way, internal rate of return is the right measure; for a single in-and-out, this is exact. Enter net figures if you want fees and taxes reflected.
Related tools
- ROI Forecast Calculator — Calculate ROI, payback period and annualised return, and avoid the comparison errors the simple formula invites.
- Loan Calculator — Work out the monthly payment on a loan and see what the total interest actually costs over the full term.
- Profit Margin Calculator — Calculate gross and net profit margins.
- Break-even Calculator — Calculate the break-even point for your business.
Frequently Asked Questions
What is the difference between ROI and annualised return?
ROI is total profit over the amount invested, ignoring time. Annualised return is the equivalent yearly compound rate. Two investments with the same ROI but different durations have very different annualised returns, which is the fair basis for comparison.
Why should I compare on annualised return?
Because total ROI hides time. A 50 percent return in six months is far better than 50 percent over five years. Annualising both puts them on the same yearly scale so the comparison is honest.
Does it account for fees and taxes?
Only if you enter net figures. The calculator uses the invested and returned amounts you provide, so subtract fees and taxes first if you want them reflected in the result.
Can it handle investments with dividends or extra contributions?
Not directly; it models a single amount in and a single amount out. For investments with cash flows along the way, internal rate of return (IRR) is the correct measure.
What does a negative ROI mean?
You got back less than you put in. The tool shows the loss as a negative percentage; over a period, the annualised figure is also negative, representing the yearly rate of loss.
Privacy & Security
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About This Tool
This tool runs entirely in your browser. No data is sent to any server, ensuring complete privacy. Simply use the interface above to get started — no registration or login required.
Disclaimer: This tool is provided "as is" without warranty of any kind. Results are for educational and utility purposes.
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ROI Forecast Calculator
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