How do you calculate ROI?
Subtract what you put in from what you got back, then divide by what you put in. Multiply by 100 for a percentage.
ROI = (final value + income − total invested) ÷ total invested × 100For $10,000 that grew to $16,500, the gain is $6,500, and $6,500 ÷ $10,000 gives 65%. This calculator counts Costs and fees and anything you added as money invested, so they lower your ROI the way they should. Income received, such as dividends or rent you took out, counts as money you got back.
Total vs. annualized return: which number should I use?
Use total ROI to answer "how much did I make?" Use annualized return to answer "was that good for the time it took?" The same 65% looks very different depending on how long it took.
| Years held | Total ROI | Annualized return |
|---|---|---|
| 1 | 65% | 65% |
| 2 | 65% | 28.45% |
| 3 | 65% | 18.17% |
| 5 | 65% | 10.53% |
| 10 | 65% | 5.14% |
| 20 | 65% | 2.54% |
Annualized return is the steady yearly rate that would produce the same result, so it accounts for compounding. It's also called CAGR. With no money added, it's this:
Annualized return = (ending value ÷ starting value)^(1 ÷ years) − 1Here's why it matters. The comparison below uses the calculator's default examples. The biggest total ROI isn't the best annual result.
| Investment | Invested | Final value | Years | Total ROI | Annualized |
|---|---|---|---|---|---|
| Index fund | $10,000 | $16,500 | 5 | 65% | 10.53% |
| Rental property | $60,000 | $95,000 | 8 | 58.3% | 5.91% |
| Business stake | $25,000 | $60,000 | 10 | 140% | 9.15% |
A higher past return also doesn't mean a better investment. It ignores the risk you took and tells you nothing certain about the future.
How do I work out ROI on a rental property?
Enter the cash you put in, not the home's price, and the cash you'd walk away with. The rental preset uses $80,000 invested, $12,000 in costs, $42,000 of income over 10 years, and a $140,000 final value. That gives a total ROI of 97.8% and 7.06% a year.
- With a mortgage, your final value is the sale price minus the loan payoff and selling costs. Using the full sale price makes the ROI look far better than it is.
- Income should be rent minus what you actually spent, including repairs, vacancy, insurance, taxes, and mortgage payments. Gross rent will inflate your result.
- Timing is simplified. The calculator treats income as arriving in the final year for annualizing. Income collected earlier is worth more than that, so treat the annual figure as an estimate.
Deciding whether to buy your own home is a different question, and the rent vs. buy calculator fits it better. A CPA can run the depreciation and tax rules on a rental.
How do I find ROI with regular contributions?
Enter the yearly amount under Added each year, and read the annualized figure rather than the total. Start with $10,000, add $3,000 a year for 5 years, and end with $32,000. You invested $25,000 in total, so total ROI is 28%. Annualized, it's 7.71%.
Total ROI looks low here because your later deposits had less time to grow. The annualized figure solves for the rate that fits each year's cash flow, so it's the fairer number. The calculator assumes additions come at the end of each full year, and it ignores a partial final year when counting them. For monthly deposits, enter the 12-month total. For a future projection, use the investment calculator.
Two ways ROI can fool you: short holds and revenue
Short holds exaggerate. A 10% gain in 6 months annualizes to 21%. By the same math, a 3% gain in one month annualizes to 42.58%. Those figures assume you could repeat the result every period, which you may not be able to. For a hold under a year, trust the total ROI more.
Revenue isn't return. The marketing preset shows $20,000 of spending and $52,000 of revenue, an ROI of 160%. But revenue has costs of its own. At an example 40% gross margin, the campaign brought $20,800 of gross profit, and the ROI on that is 4%. The same campaign looks like a big win or close to break-even, depending on which number you enter. Use profit for ad spend, equipment, or automation.
What is my return after tax and inflation?
The default example falls from 10.53% a year to 9.2% after a 15% tax on the gain. Separately, 2.5% inflation brings the pre-tax figure to 7.84% in real terms. Set your own rates under More options. Note that Real annualized doesn't subtract tax, so your true after-tax, after-inflation return is lower than either one.
The real tax depends on how long you held. The IRS treats a gain as long-term if you held the asset more than one year, and net short-term gains are taxed as ordinary income. For 2026, a single filer pays 0% on long-term gains up to $49,450 of taxable income, 15% up to $545,500, and 20% above that, with exceptions for some assets. The calculator uses one flat rate, so it's a rough guide.
Losses have a use too. The $15,000 investment that falls to $11,000 loses $4,000. Capital losses can offset gains, and up to $3,000 a year of excess loss ($1,500 if married filing separately) can offset other income, with the rest carried forward. A tax professional can check how this applies to your return. To see how a past amount compares in today's dollars, try the inflation calculator.
Common questions
What is a good ROI?
There's no universal number, and this site doesn't set a target. Compare the annualized figure with what you could have earned elsewhere at similar risk, such as a stated rate on an insured savings account, after your own costs.
What is the difference between ROI and the multiple?
ROI is the gain as a percentage of what you invested. The multiple is what you got back per dollar. $10,000 becoming $16,500 is a 65% ROI and a 1.65x multiple.
How do I calculate ROI for a stock with dividends?
Enter the purchase cost as Amount invested and the sale value as Final value. Add dividends you took as cash under Income received, and commissions under Costs and fees. If dividends were reinvested, they're already in your final value, so don't add them again.
Can I calculate ROI between two dates?
Years held moves in half-year steps, so round your dates to the nearest half year. For 18 months, enter 1.5. If the exact dates matter, count the days, divide by 365, and use the annualized formula above.
Why is annualized return blank or missing?
It needs a holding period above zero and money invested. With added money, it also needs a cash flow pattern that can be solved. Check that Years held and Amount invested aren't zero.
Sources
- Topic no. 409: Capital gains and losses · Internal Revenue Service
- Revenue Procedure 2025-32, section .03: maximum capital gains rate amounts for 2026 · Internal Revenue Service
- Mutual funds: past performance and risk · U.S. Securities and Exchange Commission, Investor.gov