What This Calculator Does
Return on Investment (ROI) measures how much profit or loss an investment generated relative to its initial cost. This calculator computes your total ROI, net gain or loss in dollars, and an annualized return that accounts for how long you held the investment.
The Formula
Total ROI is calculated as: ROI (%) = ((Final Value – Initial Investment) / Initial Investment) × 100. Because a large ROI over ten years looks very different from the same ROI over one year, the calculator also computes an annualized return using the compound growth formula: ((Final Value / Initial Investment)^(1/Years) – 1) × 100, which spreads the total gain evenly across each year for a fairer comparison between investments held for different lengths of time.
Important Notes
This calculator does not account for taxes, fees, inflation, or additional contributions made during the holding period, all of which can meaningfully change your real-world return. It is intended for general educational and planning purposes only and does not constitute investment advice.