ROI Calculator
Calculate return on investment
Formula
ROI = (FV − P) / P × 100%
- ROI = Return on Investment (%)
- FV = Final Value
- P = Initial Investment (Principal)
Annualized ROI = (FV / P)^(1/t) − 1
- t = Time in years
FAQ
Why use annualized ROI instead of total ROI?
Total ROI doesn't account for time. A 50% return over 10 years is very different from 50% over 2 years. Annualized ROI lets you compare investments on an apples-to-apples basis.
Does ROI account for inflation?
Standard ROI does not. To find your real (inflation-adjusted) return, subtract the inflation rate from your annualized ROI. For example, 8% ROI minus 3% inflation = 5% real return.
What is the difference between ROI and IRR?
ROI is a simple ratio comparing beginning and ending values. IRR (Internal Rate of Return) is more complex — it accounts for the timing and size of multiple cash flows over time, making it better for project analysis.