ROI Calculator
Investing & MarketsCalculate the return on investment and net profit from any investment.
ROI
Your return on investment, expressed as a percentage of the original cost.
Net Profit
$1,500.00
Your dollar profit or loss on this investment.
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Investing & Markets calculators
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SponsoredReturn on investment, or ROI, measures how much profit or loss an investment produced relative to what it cost. The formula is simple: subtract your investment cost from the amount you got back, then divide by the investment cost. This calculator does that instantly, showing both your dollar profit and your ROI as a percentage.
ROI works the same way regardless of what you invested in. A stock trade, a rental property, a small business, a marketing campaign, or a piece of equipment can all use the same formula, since ROI only cares about total cost in and total value out, not what kind of asset sits in between.
Simple ROI has one real blind spot: it says nothing about how long the investment took. A 50% ROI earned in six months is a very different result from the same 50% earned over ten years, even though the raw percentage is identical. If you're comparing investments held for different lengths of time, our CAGR Calculator converts total ROI into an annualized, time-adjusted rate you can compare directly.
For an accurate figure, include every real cost of the investment, purchase price, fees, and commissions, not just the sticker price, since a return that ignores real costs will overstate how well the investment actually performed.
ROI Formula: How to Calculate ROI
The ROI formula is: ROI = (Return Amount - Investment Cost) / Investment Cost x 100. The result tells you how many cents of profit you made for every dollar invested, expressed as a percentage. A 25% ROI means every dollar invested came back with an extra 25 cents of profit; a -25% ROI means you lost 25 cents on every dollar.
Example: you invest $20,000 in a small business and later sell your stake for $26,000. Your net profit is $26,000 - $20,000 = $6,000, and your ROI is $6,000 / $20,000 x 100 = 30%.
Example: you put $5,000 into a stock position and sell for $4,200. Your net profit is $4,200 - $5,000 = -$800, a loss, and your ROI is -$800 / $5,000 x 100 = -16%. A negative ROI simply means the investment lost money; it isn't an error in the formula.
- Add up everything the investment actually cost you, including fees and commissions, not just the purchase price.
- Add up everything you actually received back from it, including any income along the way, not just the final sale price.
- Subtract the cost from the return to get your net profit or loss.
- Divide that number by the original cost, then multiply by 100 to express it as a percentage.
ROI for Real Estate and Rental Property
The same ROI formula applies to real estate: your investment cost is what you actually paid to get into the deal, and your return is what you received back. If you're evaluating a property specifically, our ROI Calculator for Real Estate Investment is built around a property's actual purchase costs (down payment plus closing costs) and total return (sale proceeds plus any rental income collected), and our ROI Calculator for Rental Property works out an ongoing annual ROI from your cash invested and your annual net rental income.
Cash-on-Cash Return vs. ROI
If you financed the property with a mortgage, you may also see the term cash-on-cash return, a related but distinct metric. Cash-on-cash return divides your annual pre-tax cash flow by the actual cash you put in, typically your down payment, closing costs, and any upfront repairs, not the property's full purchase price. The ROI Calculator for Rental Property above already uses this cash-invested approach for its Annual ROI figure; this page's own ROI Calculator uses your full stated investment cost instead, so pick whichever matches how you actually financed the property.
Limitations of ROI
Simple ROI has three well-known blind spots. First, it ignores time: a 50% ROI over one year and the same 50% ROI over ten years are treated identically, even though the first is a far better result. Second, it ignores risk: a 15% ROI on a savings account and a 15% ROI on a speculative startup are not equally impressive, since one carries far more chance of loss. Third, it depends entirely on how you define cost and return: two people can calculate very different ROI figures for the same investment simply by including or excluding different fees, taxes, or cash flows.
| Total ROI | Time Period | Annualized ROI (CAGR) |
|---|---|---|
| 50% | 1 year | 50.00% |
| 50% | 3 years | 14.47% |
| 50% | 5 years | 8.45% |
| 50% | 10 years | 4.14% |
Comparing two investments held for different lengths of time? Convert both to an annualized rate first so the comparison is fair.
For a deeper breakdown of what's actually driving your return on a stock or company specifically, our DuPont Analysis Calculator splits return into profit margin, asset turnover, and financial leverage, rather than one blended number.
The cost-and-return definition problem is especially real for something like an MBA or other degree: is the cost just tuition, or does it also include lost income while studying, and is the return just a higher salary, or also career opportunities that are harder to put a number on. Our College ROI Calculator is built specifically around that tradeoff, rather than the two-lump-sum model above.
Frequently Asked Questions
What is a good ROI?
There's no single number that counts as a good ROI, since it depends on what you're comparing against. As a rough anchor, a broad U.S. stock market index fund has averaged roughly 10% per year historically before inflation, or about 7% after inflation, over the long run. An ROI that beats that benchmark over a comparable time period has genuinely outperformed a simple low-cost index fund; one that falls short hasn't, even if the raw percentage still looks positive.
Should fees and taxes be included in investment cost?
For an accurate true return, include any transaction fees, commissions, or other costs in your investment cost figure, since these reduce your actual net return even though they may not always be obvious upfront.
What's the difference between ROI and IRR?
ROI compares total return to total cost as a single percentage and ignores timing entirely. IRR (internal rate of return) accounts for when each cash flow happens, which matters when money goes in or comes out at multiple points in time rather than as one lump sum at the start and one at the end. For a single lump-sum investment with one exit, ROI and an annualized ROI figure are usually enough; for a project with several cash flows over time, like a rental property with monthly income, IRR gives a more accurate picture.
What's the difference between ROI and ROE?
ROI measures return against your total investment cost, including any money you borrowed to make the investment. ROE (return on equity) measures return against only your own capital, excluding borrowed funds. The two can differ significantly whenever leverage or financing is involved.
Is cash-on-cash return the same as ROI?
Not exactly. ROI divides your profit by your total investment cost. Cash-on-cash return divides your annual cash flow by only the cash you actually put in, such as a down payment, not the full purchase price. On a financed property, the two can produce noticeably different percentages for the same deal.
How do I calculate ROI on a rental property?
Add up your total cost to acquire the property, including down payment, closing costs, and any renovation spending, then add up your total return, including net sale proceeds and any rental income collected along the way. Subtract cost from return, then divide by cost, the same formula used above. Our ROI Calculator for Real Estate Investment and ROI Calculator for Rental Property build these specific fields in directly.
Can ROI be negative?
Yes. A negative ROI simply means the return amount was less than the investment cost, so the investment lost money overall. It's a valid, expected result, not an error, and this calculator will show it correctly as a negative percentage.
Can ROI be greater than 100%?
Yes. An ROI over 100% means the investment more than doubled: a return of 100% means you got back twice what you invested, 200% means triple, and so on. There's no upper limit built into the formula.
Can I calculate ROI in a spreadsheet?
Yes. The formula is exactly what's used above: subtract investment cost from return amount, then divide by investment cost. In Excel or Google Sheets, that looks like =(B1-A1)/A1 with the result cell formatted as a percentage, where A1 is your cost and B1 is your return.
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