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ROI Calculator

Calculate return on investment (ROI) for any investment. Analyze gains, losses, annualized returns, and compare multiple investment opportunities.

Investment Information

Investment Details

$

Amount originally invested

$

Current value or sale price

$

Fees, commissions, taxes, maintenance costs

How long was the money invested?

ROI Analysis Results

25.0%
Return on Investment (ROI)
$2,500
Total Gain
11.8%
Annualized Return

Investment Performance

Performance Rating Good
Above average returns for a 2-year investment period

Investment Summary

Initial Investment: $10,000
Final Value: $12,500
Additional Costs: $0
Investment Period: 2.0 years
Net Investment: $10,000
Net Return: $2,500

Benchmark Comparison

S&P 500 (avg 10.5% annually): $2,205
Bonds (avg 4% annually): $816
High-yield savings (3% annually): $609
Your investment vs S&P 500: +$295 better

ROI Calculation

ROI = ((Final Value - Initial Investment - Costs) / Initial Investment) × 100
ROI = (($12,500 - $10,000 - $0) / $10,000) × 100 = 25.0%

What If Scenarios

If invested $5,000 more: $1,250 additional gain
If held 1 year longer: Estimated $1,473 total gain
Monthly equivalent return: $104/month

Understanding Return on Investment (ROI)

What is ROI?

ROI measures the efficiency of an investment by comparing the gain or loss relative to the initial cost, expressed as a percentage.

Basic Formula:
ROI = (Gain - Cost) / Cost × 100%

ROI vs Annualized Return

While ROI shows total return, annualized return accounts for time, making it better for comparing investments of different durations.

  • • ROI: Total percentage gain/loss
  • • Annualized: ROI adjusted for time period
  • • Use annualized for comparisons
  • • Time significantly impacts returns

ROI Benchmarks

Good ROI varies by investment type, time horizon, and risk level. Here are typical annual return expectations:

  • • Stocks: 10-12% annually (long-term)
  • • Bonds: 3-6% annually
  • • Real Estate: 8-12% annually
  • • Savings: 1-4% annually

ROI Analysis Best Practices

Include All Costs

  • • Transaction fees and commissions
  • • Taxes on gains and dividends
  • • Management fees and expenses
  • • Opportunity costs of capital
  • • Time value of money considerations

Consider Time Factors

  • • Use annualized returns for comparisons
  • • Account for inflation impact
  • • Consider compounding effects
  • • Evaluate holding period requirements
  • • Factor in liquidity constraints

Risk Considerations

  • • Higher returns usually mean higher risk
  • • Diversification reduces overall risk
  • • Past performance doesn't guarantee future results
  • • Consider maximum acceptable loss
  • • Evaluate risk-adjusted returns

Making Better Decisions

  • • Compare to relevant benchmarks
  • • Set realistic return expectations
  • • Regular portfolio rebalancing
  • • Don't chase past performance
  • • Consider professional advice for large sums

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