Return on Investment (ROI) Calculator
Calculate the profitability of an investment.
About this Tool
The Return on Investment (ROI) calculator measures the profitability of an investment as a percentage. It compares the net profit of an investment to its initial cost. ROI is a simple and powerful metric to evaluate the efficiency of an investment and compare the performance of different investments.
Common Use Cases
Evaluating Investments
Compare the ROI of different investment opportunities like stocks, real estate, or starting a business.
Business Decisions
Assess the potential return of a new project, marketing campaign, or equipment purchase.
Personal Finance
Calculate the ROI on personal investments, such as a home renovation or educational course, to see if it was financially worthwhile.
Pro Tips
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Include All Costs
For an accurate ROI, your 'Initial Investment' should include all costs associated with the investment, such as fees, taxes, and maintenance.
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Consider the Time Frame
ROI doesn't inherently account for time. A 20% ROI over one year is much better than a 20% ROI over five years. For time-sensitive comparisons, consider using Annualized ROI.
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Compare to a Benchmark
Compare your investment's ROI to a benchmark, like the S&P 500's average return (typically 7-10%), to see if it was a good use of your money.