A walkthrough, end to end.
- 1
Enter the initial cost (what you invested) and the final value (what it's worth or sold for).
- 2
Optionally add a holding period to get annualized ROI alongside total ROI.
- 3
Read both numbers — total ROI is what you actually made; annualized is the rate to compare against other investments.
ROI math
Total ROI is the percentage gain (or loss) relative to cost. Annualized ROI accounts for time — the equivalent constant annual return that produces the same result. Critical when comparing investments of different durations.
What you can do with this.
Stock investment ROI
Bought $5,000 of stock 4 years ago, sold for $7,500. Total ROI = 50%. Annualized ROI = 10.7% — the return rate that, compounded annually for 4 years, produces the same result.
Real estate ROI
Bought a property for $200K, sold for $260K after 5 years. Total ROI = 30%. Don't forget to subtract closing costs, agent commissions, and improvements from the gain — they reduce real ROI substantially.
Marketing campaign ROI
$10K ad spend produced $35K in attributable revenue. Total ROI = 250%. Marketing teams often use ROAS (return on ad spend) instead — same idea, different framing (ratio vs. percent gain).
Business investment ROI
$50K equipment generates $15K/yr in additional profit. Year-1 ROI = 30%; over 5 years = 150% (assuming consistent profit). Compare this rate to your cost of capital to decide if the investment makes sense.
Comparing investment options
Annualized ROI normalizes durations: 50% over 5 years = 8.4% annualized vs. 25% over 2 years = 11.8% annualized. The 25%-in-2-years deal is the better return — easy to miss without annualizing.
ROI vs. IRR
ROI ignores the timing of cash flows; IRR accounts for them. For a single investment with one purchase and one sale, they agree. For multiple cash flows over time, IRR is more accurate.
Negative ROI / loss
ROI works for losses too: bought $10K, worth $7K = −30% ROI. Useful for evaluating mistakes objectively rather than emotionally.
ROI calculator 2026 — what's current
S&P 500 has produced ~10% nominal annualized over decades. Use this as a benchmark — investments under that bar should have a strong reason (real estate diversification, leverage, lifestyle benefit) to justify capital allocation.
Frequently asked.
Annualized — it normalizes for time. Two investments with the same total ROI can have very different annualized rates if held for different durations.
Not by default. Long-term capital gains tax (15–20%) reduces real ROI. Subtract estimated tax to get after-tax ROI for fair comparison vs. tax-advantaged accounts.
Yes — add the cumulative income to the final value before calculating. Total return = price gain + income received. This is what 'total return' indices (like SPY total return) use.
No. Calculations run entirely in your browser.