ROI Calculator
Calculate return on investment, profit or loss, and ROI percentage instantly.
How to Use the ROI Calculator
Enter the initial investment and final value or profit to calculate return on investment.
Practical Example
If you invest USD 5,000 and earn USD 1,000 profit, ROI is 20%.
Factors That Affect the Result
ROI does not automatically account for time, taxes, fees, inflation or risk, so comparisons should use consistent assumptions.
Frequently Asked Questions
Can ROI be negative?
Yes. A loss produces negative ROI.
Does ROI include time?
Not unless you annualize it separately.
Is higher ROI always better?
Not necessarily; risk and time also matter.
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How ROI Measures Return
Return on investment compares the gain or loss from an investment with its cost. A common formula is ROI = (return − cost) / cost × 100. If an investment costs 1,000 and produces 1,200 in value, the simple ROI is 20% before considering other costs.
Define Cost and Return Consistently
ROI can be misleading when important expenses are omitted. Depending on the decision, costs may include fees, advertising, labor, financing, maintenance, taxes, or opportunity cost. The return should be measured over the same scope and period.
Simple ROI also ignores how long the investment took to generate the result. A 20% return over one year is different from 20% over five years. For time-sensitive comparisons, annualized returns, CAGR, NPV, or IRR can provide additional context. Use ROI as one decision metric rather than a complete measure of risk or profitability.