ROI Calculator

What this calculator answers

How much an investment gained or lost compared with what you put in, and the steady yearly rate that would have produced the same result over the time you held it. It counts the income the investment paid you in cash and the costs you paid along the way, so the answer is your net return, not just the change in price. It suits one purchase held to a sale or to today: shares, a fund, a collectible, a piece of equipment or a small business stake.

How to use it

• Amount invested: what you paid at the start, in dollars. 10,000, $10,000 and 10k all work.
• Final value: what you sold it for, or what it is worth today. Enter 0 if nothing is left.
• Cash income (optional): money the investment paid out to you while you held it, such as dividends, interest or rent. Leave out dividends that were reinvested, because they bought more shares and are already in the final value.
• Costs and fees (optional): commissions, account or advisory fees billed to you, and any tax you want the result to account for.
• Holding period: the start and end dates, or years and months. Leave the years and months blank if you only want the total ROI.
• Inflation rate (optional): the average yearly inflation over the period, in percent, for the return after inflation, measured in what the money could buy.
• I added or withdrew money along the way: tick it if the amount invested changed during the period (see “ROI vs CAGR vs IRR” below).

Results update as you type. The Try buttons load a total loss, costs larger than what was left, a 10% gain in one month, and the example after 3% inflation. To compare investments held for different lengths of time, press Save for comparison, change the inputs and save again: each saved scenario shows its difference from the first, and a higher annualized return is marked as better. An investment held for less than a year isn’t ranked this way, because its annualized figure is only a pace (see why short holding periods exaggerate annualized returns, below).

How to calculate ROI

Add the income to the final value, subtract the costs, subtract what you invested, and divide by what you invested. To annualize it, add 1, raise it to the power of 1 divided by the years held, and subtract 1.

• $P$ is the amount invested.
• $F$ is the final value, $I$ the income received and $C$ the costs and fees, so $F + I - C$ is the net value.
• $t$ is the holding period in years: the days between the dates divided by 365.25, or months divided by 12.
• $a$ is the annualized return, the rate that, compounded once a year for $t$ years, turns 1 into $1 + \text{ROI}$.

Worked example: $10,000 held for 3½ years

You invest $10,000 on March 15, 2023. By September 15, 2026 the holding is worth $12,500. Along the way it paid $400 of dividends in cash, and you paid $150 in fees.

1. Net value: $12,500 + $400 − $150 = $12,750.00.
2. Net gain: $12,750.00 − $10,000 = $2,750.00.
3. ROI: $2,750.00 ÷ $10,000 = 0.275, or 27.50%. The multiple of money is 1.275, shown as 1.28×.
4. Holding period: March 15, 2023 to September 15, 2026 is 1,280 days, so t = 1,280 ÷ 365.25 = 3.5044 years.
5. Annualized return: 1.275^(1 ÷ 3.5044) − 1 = 0.0718, or 7.18% a year.

A final value of $9,750.00 would have broken even: $10,000 invested plus $150 of fees, less the $400 of income. Entered as 3 years and 6 months instead of dates, the period is exactly 3.5 years and the annualized return is 7.19%.

Total ROI vs annualized ROI

ROI is the total return over however long you held the investment; the annualized return is the same result spread into an equal rate for each year. A 27.50% ROI over the example’s 1,280 days and a 27.50% ROI over one year are very different results: 7.18% a year against 27.50% a year. To compare investments held for different lengths of time, compare their annualized returns.

The annualized return compounds: each year’s return builds on the last. Dividing the ROI by the years instead gives a simple average, 27.50% ÷ 3.5044 = 7.85% for the example. For a gain held longer than a year, the simple average is always the higher of the two, because it ignores that later growth came on top of earlier growth.

Why short holding periods exaggerate annualized returns

Annualizing assumes the pace you saw would continue for a whole year, compounding as it went. Over a few weeks or months that assumption turns ordinary moves into huge yearly rates: a 10% gain in one month becomes 1.1¹² − 1 = 213.84% a year. The table shows the example’s 27.50% ROI spread over other lengths of time.

Under a year, the calculator still shows the annualized figure but says it holds only if the pace lasted a whole year. Under 30 days it shows the total ROI as the answer and puts the annualized figure in the small print. The GIPS standards that investment firms follow when they report performance go further and don’t allow returns for periods shorter than a year to be annualized at all.

Dates and the 365.25-day year

Years are the days between your dates divided by 365.25, the average length of a year with a leap day every fourth year. Over several years this matches the calendar closely: 1,461 days, four years that include one leap day, is exactly 4 years. A single calendar year is 365 or 366 days, so it counts as 0.9993 or 1.0021 years, and a 10% gain over one calendar year shows as 10.01% or 9.98% a year. Entering 12 months under years and months gives exactly 10.00%.

Can ROI be negative? Losses, total loss and fees

Yes. ROI is negative whenever the net value is below the amount invested. $10,000 that falls to $7,000 over 2 years is a −30.00% ROI, or −16.33% a year.

A total loss, with nothing left and no income or costs, is −100%, and the annualized return is also −100% however long you held it. ROI goes below −100% only when costs are larger than what was left: $10,000 invested with a final value of $0 and $500 of closing costs is (0 − 500 − 10,000) ÷ 10,000 = −105.00%. You lost more than you put in. There is no annualized return in that case, because no yearly rate turns a positive amount into a negative one, and the calculator says so instead of showing an error.

Should ROI include dividends, fees and taxes?

Include what actually changed the money you ended up with. Dividends and interest paid to you in cash are part of the return; leave them out and a stock that paid a large dividend can look like a loss. Fees and commissions you paid reduce the return. Taxes are optional: leave them out for a pre-tax ROI, or add the tax you paid on the gain and the income to the costs for an after-tax ROI.

Two amounts are already inside the final value and should not be entered again. A fund’s operating expenses are taken from the fund’s assets, so they are reflected in its value. Dividends that were reinvested bought more shares, so they are part of the final value too.

This calculator subtracts costs from the gain; it doesn’t add them to the amount invested. If you would rather treat a purchase commission as part of what you invested, add it to the amount invested and leave it out of costs. The results differ slightly because the divisor changes.

ROI vs CAGR vs IRR: which one to use

• ROI is the total gain or loss as a percentage of what you put in, for one amount invested at the start.
• Annualized ROI spreads that over the years held. For one amount with no income or costs it is the same number as the CAGR of the investment’s value; a CAGR calculator works on any two values, such as revenue or prices.
• IRR (internal rate of return) is the measure to use when money went in or came out more than once, because it counts when each amount moved.

Money added part way through makes ROI misleading. Say you invest $10,000, add another $10,000 a year later, and have $22,000 at the end of year 2. Treating all $20,000 as invested from the start gives a 10.00% ROI and 4.88% a year, but half the money was invested for only one year. The IRR of those cash flows is 6.52% a year. When you tick “I added or withdrew money along the way”, the calculator says this and, for a holding period of whole months, offers to carry your start and end amounts to an NPV and IRR calculator as yearly, quarterly or monthly cash flows, so you can fill in the rest.

ROI on a rental property

Rent, mortgage payments, repairs and a sale price turn a property into many cash flows over many years. A rental property calculator works through those, with cash flow, cap rate and cash-on-cash return; this page suits the simple case of a purchase price, net rent received and a sale.

Reading the result

• ROI (the headline) is the net gain as a percentage of the amount invested, with the dollar gain or loss and the dates under it.
• Annualized return is the yearly rate. Under a year it is marked as holding only if the pace lasted; under 30 days it is replaced by “Not meaningful” with the figure in the small print. With an inflation rate, the rate after inflation is shown under it.
• Holding period shows the days and the calendar years, months and days between your dates, and the years used in the formula.
• Net value, multiple of money and break-even final value are what you ended up with after income and costs, that amount as a multiple of what you put in, and the final value that would have given 0%.
• How this was calculated repeats each step with your numbers and ends with the same formulas for a spreadsheet.
• The same ROI over other holding periods keeps your amounts and changes only the time, with the simple average beside the annualized return; Download CSV saves its rows.

Assumptions and limitations

• The whole amount invested counts as going in on the start date, and the final value, income and costs as arriving on the end date. Income received early and costs paid early are not given any extra weight.
• Deposits and withdrawals in between are not modeled. Use an IRR for those.
• The inflation-adjusted return uses (1 + return) ÷ (1 + inflation) − 1, which is the return of the net value measured in start-date dollars, and treats the rate you enter as the average for every year. Subtracting the inflation rate from the return gives a close but slightly different figure.
• Taxes are counted only if you add them to costs. What is taxed depends on the investment and the kind of account; fund distributions in a taxable account can be taxed even when they are reinvested.
• ROI measures what happened; it doesn’t measure risk, and a past return says nothing certain about future ones.
• Results are rounded for display, and the whole page is an educational estimate, not investment or tax advice.

Common mistakes

• Annualizing a few weeks. A 10% gain in one month is not a 213.84% investment. Quote the total ROI for short periods.
• Comparing total ROI across different holding periods. 40% over ten years is a lower yearly return than 15% over one year. Compare annualized returns.
• Counting reinvested dividends twice. If dividends bought more shares, they are in the final value already; income is only cash paid out to you.
• Leaving out fees and commissions. Commissions on the purchase and on the sale come out of your gain, as do account and advisory fees you paid.
• Using ROI when you added money over time. Regular contributions to an account make the ending balance larger without being a return. Use an IRR, or XIRR in a spreadsheet, with the date of each amount.
• Entering the gain as the final value. The final value is the whole amount at the end, $12,500 in the example, not the $2,500 increase.