ROI Calculator with Annualized Return
Enter your initial investment, any additional fees or costs, the final value, and the time period. The calculator shows simple ROI and — more importantly — the annualized return, which puts long and short investments on a level playing field.
Annualized Return (CAGR)
11.87%
per year, compounded
Simple ROI
40.00%
total over 3y
Net Gain
$4,000.00
Investment Summary
Invested vs Final Value
How it works
Simple ROI tells you the total percentage gain or loss: (final value − total invested) ÷ total invested × 100. It is easy to understand but misleading across different time horizons. A 50% ROI sounds impressive until you learn it took 10 years to achieve — that works out to roughly 4% per year, which barely keeps pace with inflation. Always read ROI alongside the time it took.
Annualized ROI (also called CAGR — Compound Annual Growth Rate) answers the question: what single annual rate, compounded every year, would produce this outcome? The formula is (finalValue ÷ totalInvested)^(1 ÷ years) − 1. This geometric-mean rate lets you compare a 3-year investment against a 7-year one fairly, because both are expressed as a consistent annual figure.
Including all costs in the investment base matters more than most people realize. A $1,000 investment that grows to $1,500 with $100 in fees produces a 36% ROI, not 50% — because your actual outlay was $1,100. This calculator adds additional costs (brokerage fees, fund expenses, transaction charges) to the initial investment before any calculation, so the number reflects what you actually put at risk.
Frequently asked questions
What's a good ROI?+
There is no single right answer — it depends entirely on the alternative uses of that capital, the risk taken, and the time involved. A 10% annualized ROI in a low-risk bond is exceptional; the same 10% in a volatile startup equity is mediocre given the risk. The relevant benchmark is always the opportunity cost: what would that money have earned in the next-best option? This calculator cannot tell you whether your ROI is good — that judgment requires context no tool can see.
What is the difference between ROI and IRR?+
ROI treats money as if it all moved at once — a single investment in and a single exit value out. Internal Rate of Return (IRR) handles real-world cash flows that occur at different times: additional contributions, partial withdrawals, dividend payments. If your investment involved only one in and one out, ROI and IRR will be identical. If money moved at multiple points during the holding period, IRR is the correct metric and this calculator will give you the wrong answer for that scenario.
Should I include taxes in the calculation?+
For a true after-tax picture, yes — include tax on gains in the additional costs field, or reduce the final value to what you actually pocket after tax. Capital gains tax, dividend tax, and transaction fees all reduce real returns. The pre-tax ROI reported by most brokers looks better than what you keep. If you are comparing investment options, use the same tax treatment for each to keep the comparison fair.