Investment Return / ROI Calculator
Calculate simple ROI, annualized ROI (CAGR), and real ROI (inflation‑adjusted) in seconds. You can also model a simplified after‑tax return.
Inputs
Optional Settings
Results
Enter your initial investment and final amount to see the results.
Disclaimer: All calculators on this website are provided for informational and illustrative purposes only. The results do not constitute professional advice (including legal, tax, financial, medical, or other advice). Despite careful programming, we assume no liability for the accuracy, completeness, or timeliness of the results. For matters requiring professional advice, we recommend consulting an appropriate specialist (e.g., a tax advisor, lawyer, accountant, or physician).
What is ROI?
ROI (Return on Investment) measures how much you gained (or lost) relative to what you invested. It’s commonly expressed as a percentage, so you can compare opportunities with different dollar amounts.
How We Calculate Investment Returns
Transparency matters—especially for finance. This calculator uses standard ROI and CAGR formulas and then optionally applies simplified adjustments for taxes and inflation.
The Core Formulas
- Simple ROI: ((Final Value - Initial Investment) / Initial Investment) Ă— 100%
- Annualized ROI (CAGR): ((Final Value / Initial Investment)^(1 / Years)) - 1
- Real ROI (Inflation Adjusted): adjusts nominal annualized return using an inflation rate (purchasing-power return).
Investment & ROI Glossary (Specialist Terms)
If you want “super SEO” clarity: here are common investing terms and what they mean in plain English. These definitions help you interpret ROI correctly and compare deals fairly.
- CAGR (Compound Annual Growth Rate)
- The single annual rate that compounds from initial value to final value over a period.
- IRR / XIRR
- A return rate that accounts for multiple cash flows (and XIRR uses exact dates).
- NPV (Net Present Value)
- The value today of future cash flows discounted by a chosen rate—useful for project comparison.
- Discount rate
- The rate used to convert future cash flows into today’s dollars (often tied to risk).
- Hurdle rate
- Your minimum acceptable return to justify the risk of an investment.
- Opportunity cost
- The return you give up by not choosing the next‑best alternative.
- Nominal vs real return
- Nominal ignores inflation; real return adjusts for inflation (purchasing power).
- Total return
- Price change + dividends/interest (and possibly reinvestment), not just price gain.
- Dividend yield
- Annual dividends ÷ price. Yield can be part of total return, but it’s not the whole story.
- Expense ratio / fees
- Ongoing costs that reduce your net return (“fee drag”), especially over long horizons.
- Drawdown
- Peak‑to‑trough decline. Two investments can have the same ROI but very different drawdowns.
- Volatility
- How much returns fluctuate. Higher volatility often means higher risk—even with similar average ROI.
Investment Return Examples (2026)
The table below demonstrates how different investment scenarios perform over various time horizons. These examples show simple ROI, annualized ROI (CAGR), and a real ROI illustration (2.5% inflation). Tax is estimated at 15% for long‑term gains.
| Initial Investment | Final Value | Years | Gross Profit | Net Profit (After Tax) | Simple ROI | Annualized ROI | Real ROI (2.5% Inflation) |
|---|---|---|---|---|---|---|---|
| $10,000 | $15,000 | 5 | $5,000 | $4,250 | 42.5% | 7.3% | 4.7% |
| $25,000 | $50,000 | 10 | $25,000 | $21,250 | 85.0% | 6.3% | 3.7% |
| $50,000 | $100,000 | 7 | $50,000 | $42,500 | 85.0% | 9.1% | 6.4% |
| $100,000 | $200,000 | 15 | $100,000 | $85,000 | 85.0% | 4.2% | 1.7% |
Assumptions (illustrative): 15% tax estimate and 2.5% inflation. Use your own inputs for personalized results.
Common ROI Mistakes (and How to Avoid Them)
- Ignoring time: prefer annualized ROI (CAGR) when comparing different holding periods.
- Ignoring inflation: compare “real ROI” for long-term goals like retirement.
- Ignoring fees: expense ratios, spreads, and transaction costs reduce net return.
- Forgetting taxes: compare after‑tax ROI when deciding between accounts or strategies.
- Comparing different risk levels: ROI should be evaluated alongside volatility and drawdown.
Frequently Asked Questions
What is a good ROI?
A “good” ROI depends on risk, time horizon, and asset class. Many investors compare ROI against inflation and opportunity cost rather than using one universal benchmark.
How do I calculate annualized ROI (CAGR)?
Annualized ROI (often called CAGR) converts a multi-year result into an equivalent yearly growth rate: (Final / Initial)^(1/Years) - 1. This makes investments of different durations easier to compare.
What is the difference between nominal ROI and real ROI?
Nominal ROI is the return “as reported”. Real ROI adjusts for inflation and reflects the change in purchasing power—often the more meaningful number for long-term planning.
Does ROI include taxes?
Gross ROI does not include taxes. This calculator lets you input a tax rate estimate (e.g., capital gains tax) to show a simplified after-tax ROI.
Why can simple ROI be misleading?
Simple ROI ignores time. A 30% gain in 1 year is very different from a 30% gain in 10 years, which is why annualized ROI (CAGR) is commonly used.
Is ROI the same as IRR?
No. ROI is a simple profit-to-investment ratio. IRR (internal rate of return) accounts for the timing of multiple cash flows and is common in real estate and private investments.
What is the difference between ROI and total return?
ROI is a broad percentage gain relative to what you invested. “Total return” usually means price change plus dividends/interest (and sometimes reinvestment), expressed as a percentage over a time period.
How do fees and expense ratios affect ROI?
Fees reduce your net return (“fee drag”). Over long horizons, even a 0.5% annual fee difference can meaningfully lower ending value due to compounding.
When should I use IRR/XIRR instead of ROI?
If you contribute or withdraw money at different times (e.g., monthly investing, rental cash flows), ROI can be misleading. IRR/XIRR is designed to account for cash-flow timing.
How do dividends and reinvestment change ROI?
If dividends/interest are reinvested, compounding can increase long-term returns. If they are taken as cash, your “total return” may be the better metric to track than price-only ROI.
What ROI should I compare against?
A practical approach is to compare your after-tax, inflation-adjusted ROI to a benchmark that matches your risk (e.g., broad index funds) and to your personal “hurdle rate” (minimum acceptable return).
Related Financial Calculators
ROI is just one piece of the decision. These tools help you model compounding, inflation, and borrowing costs.
Compare ROI the Smart Way
Use annualized and real ROI (after tax when relevant) to avoid apples-to-oranges comparisons.
Model CompoundingDid you know?
A 50% gain followed by a 50% loss does not break even. Understanding drawdowns can be as important as ROI.
Quick checklist
- Time: compare CAGR when periods differ.
- Inflation: check real ROI for long horizons.
- Fees & taxes: compare what you keep.