Does this include cash drag or fees?

No. Subtract fees or friction costs before entering your final value to get a true ROI.

Can I compare projects with different time horizons?

Use the annualized ROI output so a 6-month project can be compared to a 3-year investment.

How do I handle partial years?

Enter the holding period in years as a decimal (e.g., 0.25 for 3 months).

Is ROI the same as profit margin?

No. ROI compares gain to investment; margin compares profit to revenue.

Why is annualized ROI lower than simple ROI?

Annualized ROI spreads the return over the holding period using compounding. Longer holds lower the annual rate for the same total ROI.

finance calculator

ROI Calculator

Calculate return on investment (ROI) plus annualized ROI for any holding period.

Results

ROI: 40.00%
Annualized ROI (CAGR): 11.87%

How to use this calculator

Enter the initial investment and final value.
Enter the holding period in years (use decimals for partial years).
Review simple ROI and annualized ROI (CAGR).

Inputs explained

Initial investment: Starting amount invested.
Final value: Ending amount after gains/losses (net of fees if you want net ROI).
Years held: Holding period; use decimals like 0.5 for half a year.

How it works

ROI = (Final − Initial) ÷ Initial. Annualized ROI uses compound growth: CAGR = (Final ÷ Initial)^(1/years) − 1.

Formula

ROI = (FV − IV) ÷ IV
CAGR = (FV ÷ IV)^(1/n) − 1

When to use it

Comparing campaigns or projects with different durations.
Summarizing rental or investment performance for stakeholders.
Annualizing short-term trades to compare with long-term returns.

Tips & cautions

Exclude additional contributions/withdrawals—this is a two-point ROI. Use IRR for cash-flow-heavy cases.
Use annualized ROI to compare across timeframes fairly.
If years held is zero (instantaneous), ROI is defined but annualized ROI is not meaningful.
No intermediate cash flows or timing—IRR/XIRR is needed for that.
Ignores taxes, fees, and inflation unless you adjust inputs yourself.
Assumes a single initial and final value; not for DCA or periodic deposits.

Worked examples

$5k → $7k in 3 years

ROI = 40%
CAGR ≈ 11.9%

$10k → $15k in 1 year

ROI = 50%
CAGR = 50% (same as ROI when n=1)

Deep dive

This ROI calculator shows both simple ROI and annualized ROI (CAGR). Enter initial amount, final value, and years held to compare projects or investments on equal footing.

Use it for marketing tests, rentals, or trades. For multiple cash flows or contributions, switch to IRR/XIRR for accuracy.

FAQs

Does this include cash drag or fees?: No. Subtract fees or friction costs before entering your final value to get a true ROI.
Can I compare projects with different time horizons?: Use the annualized ROI output so a 6-month project can be compared to a 3-year investment.
How do I handle partial years?: Enter the holding period in years as a decimal (e.g., 0.25 for 3 months).
Is ROI the same as profit margin?: No. ROI compares gain to investment; margin compares profit to revenue.
Why is annualized ROI lower than simple ROI?: Annualized ROI spreads the return over the holding period using compounding. Longer holds lower the annual rate for the same total ROI.

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ROI assumes deterministic cash flows. For volatile investments, consider IRR or Monte Carlo analysis.