ROI Calculator
Calculate Return on Investment
Frequently Asked Questions
How is ROI calculated?
ROI = ((Net Profit - Investment Cost) / Investment Cost) × 100. If you invest $10,000 and earn $13,000 back: ROI = (13,000 - 10,000) / 10,000 × 100 = 30%. The calculator also shows annualized ROI for multi-year investments.
What is a good ROI percentage?
It depends on the context. Stock market average: 7-10% annually. Real estate: 8-12%. Business investments: 15-25% is considered good. Marketing campaigns: 5:1 (400% ROI) is strong. Always compare ROI against your opportunity cost.
What is the difference between ROI and ROE?
ROI measures return on total investment. ROE (Return on Equity) measures return on shareholders' equity only. A property bought for $200K with $50K down payment: ROI = profit/$200K, ROE = profit/$50K. Leverage amplifies ROE.
How do I calculate annualized ROI?
Annualized ROI = ((1 + ROI)^(1/years) - 1) × 100. A 50% total return over 3 years: annualized = (1.5^(1/3) - 1) × 100 = 14.47% per year. This allows fair comparison between investments of different durations.
What costs should I include in ROI calculation?
Include all costs: purchase price, transaction fees, maintenance, taxes, opportunity cost of capital. For marketing ROI, include ad spend, agency fees, content creation costs, and staff time. Comprehensive cost tracking gives accurate ROI.