Calculate ROI, CAGR (annualized return), and net profit or loss for any investment. Compare investment returns — stocks, real estate, business — with this free ROI calculator.
ROI, annualized return & profit/loss
ROI (Return on Investment) measures total profit as a percentage of the original investment. It's a simple, universal metric: invest $10,000, end with $15,000, and your ROI is 50%. But ROI alone doesn't account for time — a 50% return in 2 years is very different from a 50% return in 10 years. That's where CAGR (Compound Annual Growth Rate) becomes essential. CAGR answers "what consistent annual return would have produced this result?" and puts all investments on an equal, time-adjusted footing. The S&P 500 has delivered a CAGR of approximately 10% annually from 1957 to 2024 — roughly 7% after inflation — making it the benchmark US investors compare almost everything else against.
For business owners, ROI analysis extends beyond stock portfolios to capital expenditures, marketing campaigns, and expansion projects. A $50,000 equipment purchase that generates $70,000 in net new revenue over 3 years has a 40% ROI and a CAGR of about 11.9% — exceeding the S&P 500 average and potentially justifying the capital allocation over market investment. Real estate investments add another layer because ROI should account for rental income, appreciation, mortgage paydown, and tax benefits together. This calculator handles the core calculation — you supply the initial investment, final value, and time period.
ROI = (Final Value − Initial Investment) / Initial Investment × 100. A 50% ROI means you earned 50 cents for every dollar invested, regardless of how long it took — which is why CAGR is needed for time comparisons.
CAGR = (Final/Initial)^(1/years) − 1. The S&P 500's CAGR is approximately 10% nominal / 7% inflation-adjusted from 1957–2024. Use CAGR to compare investments held for different time periods on an equal basis.
S&P 500: ~10% CAGR historically. US real estate: 4%–8%. High-yield savings / CDs: 4%–5% in 2025. Long-term bonds: 3%–5%. A "good" ROI always depends on risk taken and the time horizon of the investment.
Compare stock picks, evaluate business capital investments, measure marketing campaign effectiveness, assess real estate deals, or benchmark any financial decision against the opportunity cost of index fund investing.
Return on investment states profit as a percentage of the amount risked, which lets you compare opportunities of very different sizes. Its great weakness is that it is silent about time: a 50% return is superb over one year and mediocre over ten, yet plain ROI reports both identically. That is why the annualised form matters whenever holding periods differ. The other common error is understating the cost basis — transaction fees, improvements and carrying costs all belong in the denominator, and leaving them out inflates the result.
ROI = (Net profit ÷ Cost of investment) × 100Net profit = Final value − Cost of investmentAnnualised ROI = [ (Final ÷ Cost)^(1 ÷ years) − 1 ] × 100where:
Assumptions: Ignores tax, financing costs and the timing of any interim cash flows. Where money goes in and out at several points, IRR is the correct measure.
An asset bought for $43,000 with $2,000 of acquisition fees, sold three years later for $62,500 net of selling costs.
Result38.89% total ROI — 11.57% annualised
Had the $2,000 in fees been ignored, ROI would read 45.35% instead of 38.89% — a six-point overstatement from one omitted line. Always build the denominator first.