Return on Investment (ROI) measures how much profit or loss an investment generates relative to its cost. It is expressed as a percentage: ROI = (Final Value − Initial Investment) / Initial Investment × 100.

What is the difference between ROI and CAGR?

ROI gives the total percentage return over the entire investment period regardless of duration. CAGR (Compound Annual Growth Rate) normalizes the return on an annual basis, making it easier to compare investments held for different lengths of time.

Yes. A negative ROI means you lost money on the investment. For example, investing $10,000 and ending with $8,000 gives an ROI of −20%.

What is the Rule of 72?

The Rule of 72 is a quick way to estimate how many years it takes an investment to double at a given annual rate. Divide 72 by the annual return percentage. At 8% per year, an investment doubles in approximately 72 ÷ 8 = 9 years.

MOIC (Multiple on Invested Capital) shows how many times your investment has grown. A MOIC of 2.0x means the investment doubled. It is Final Value divided by Initial Investment.

ROI Calculator

Use this free ROI calculator to determine the total return on any investment, the annualized rate (CAGR), your net profit or loss, and how long it would take for your investment to double at that rate.

What is ROI?

Return on Investment (ROI) is one of the most widely used financial metrics for evaluating the profitability of an investment. It measures how much profit or loss an investment generates relative to its initial cost and is expressed as a percentage.

ROI formula:

ROI (%) = (Final Value − Initial Investment) / Initial Investment × 100

A positive ROI means you earned more than you invested. A negative ROI means you lost money. ROI is simple, intuitive, and applicable to almost any type of investment: stocks, real estate, a business, or even a marketing campaign.

Annualized ROI — CAGR

Because ROI does not account for time, a 100% gain over 10 years is very different from a 100% gain over 1 year. Compound Annual Growth Rate (CAGR) solves this by expressing the return as a steady annual rate:

CAGR = (Final Value / Initial Investment)^(1 / Years) − 1

CAGR allows you to compare investments of different durations on a fair, apples-to-apples basis.

MOIC (Multiple on Invested Capital)

MOIC is the ratio of final value to initial investment. A MOIC of 2.0x means your investment doubled, 3.0x means it tripled. Private equity and venture capital firms commonly use MOIC alongside IRR to evaluate fund performance.

Rule of 72

The Rule of 72 is a mental math shortcut for estimating how long it takes an investment to double. Divide 72 by the annual return rate. At a CAGR of 8%, your investment doubles in approximately 72 ÷ 8 = 9 years.

How to Use This Calculator

Enter your initial investment — the amount you originally put in.
Enter the final value — what the investment is worth today (or at the end of the holding period).
Enter the time period — how many years you held the investment.
Click Calculate to instantly see your ROI, CAGR, net profit, MOIC, and Rule of 72 result.

Examples

Example 1 — Stock Portfolio Growth

You invested $10,000** in a stock portfolio. After **5 years**, it grew to **$ 18,000.

ROI = (18,000 − 10,000) / 10,000 × 100 = 80%
CAGR = (18,000 / 10,000)^(1/5) − 1 = 1.8^0.2 − 1 ≈ 12.47% per year
Net Profit = $8,000
MOIC = 1.8x
Rule of 72: at 12.47%, the investment doubles in about 72 ÷ 12.47 ≈ 5.8 years

Example 2 — Real Estate Investment

You purchased a rental property for $250,000**. You sell it **10 years later** for **$ 420,000.

ROI = (420,000 − 250,000) / 250,000 × 100 = 68%
CAGR = (420,000 / 250,000)^(1/10) − 1 = 1.68^0.1 − 1 ≈ 5.30% per year
Net Profit = $170,000
MOIC = 1.68x

Example 3 — Loss Scenario

You invested $5,000** in a startup that went down to **$ 3,500 over 2 years.

ROI = (3,500 − 5,000) / 5,000 × 100 = −30%
CAGR ≈ −16.3% per year
Net Loss = $1,500
MOIC = 0.70x (you recovered 70 cents for every dollar invested)

FAQ

Does ROI account for inflation?

No. Standard ROI calculates nominal returns without adjusting for inflation. To find the real return, subtract the annual inflation rate from the CAGR. For example, a CAGR of 7% with 3% annual inflation yields a real return of approximately 4%.

Should I use ROI or CAGR?

Use ROI when you want to know the total profit percentage over the entire investment period. Use CAGR when you want to compare investments held for different lengths of time, or when you need to evaluate annual performance relative to a benchmark.

What is a good ROI?

It depends on the asset class and time horizon. The S&P 500 has historically averaged around 10% per year (7% after inflation). Real estate typically delivers 8–12% total returns including rental income. Individual stocks, private equity, and venture capital can vary widely — from large losses to multi-hundred-percent gains.

Can ROI exceed 100%?

Yes. If your investment triples, ROI is 200%. If it goes up 10x, ROI is 900%. There is no upper limit, though extraordinarily high ROIs usually involve higher risk.

Does this calculator account for dividends or rental income?

The calculator uses the total final value versus the initial investment. If you reinvested dividends or rental income, include those in the final value. If you want to measure price appreciation only, use just the ending price.