Enter your initial cost, the final value, any extra costs, and how long you held it — get net gain, ROI, and an annualized return you can compare across investments.
This page's own default — $10,000 growing to $15,000 over 3 years — is a 50% ROI, annualizing to about 14.47%. Stretch that same 50% ROI across different holding periods and the annualized figure moves dramatically: earned in a single year, 50% ROI is 50% annualized. Earned instead over 10 years, that identical 50% total return annualizes to just 4.14% a year — barely above what a savings account might pay. The headline number never changed; only how long it took to get there did.
Dividing a multi-year return by the number of years — 50% ÷ 10 = 5% a year — looks like the obvious shortcut, but it quietly assumes simple, non-compounding growth. The correct annualized figure instead asks "what single constant rate, compounded every year, reaches the same ending point?" — which is why the formula takes a root: (final ÷ initial)1/years − 1. For most real holding periods the two methods land close together, but they diverge further apart the longer the period and the larger the return, so a straight division understates the true rate.
Two investments can post an identical ROI while carrying very different risk, liquidity, or effort — a volatile stock and a fixed deposit can both land on the same 50% gain over the same period, but only one of them guaranteed it in advance. For a side-by-side against a known fixed rate, compare against the Compound Interest Calculator; to see how a series of contributions rather than one lump sum compounds toward a target, see the Investment Calculator; and if the real question is "how long until this pays for itself" rather than "what percentage did it return," the Payback Period Calculator answers that more directly.
ROI (Return on Investment) measures how much you gained or lost relative to what you put in: ROI = (final value − initial cost − additional costs) ÷ initial cost × 100. It's the simplest way to express "how much did I make on this" as a single percentage, independent of the currency or dollar amount involved, which is what makes it useful for comparing very different investments side by side.
ROI is the total return over the whole period you held the investment, however long that was. Annualized return (CAGR — Compound Annual Growth Rate) normalizes that total return to a per-year rate, so you can fairly compare investments held for different lengths of time. A 50% ROI earned in a single year is a dramatically stronger result than the same 50% ROI spread across a decade, and annualized return is what makes that difference visible at a glance.
Not by itself. Raw ROI ignores risk and the time value of money — a 50% ROI over 10 years is a very different outcome from 50% over 1 year, which is exactly why annualized return matters more than headline ROI when comparing opportunities. Two investments can post the same ROI while one required far more risk or patience than the other to get there.
Only if you enter them in the "Additional costs" field above — otherwise the calculator assumes your initial cost and final value are already net figures. Add any commissions, closing costs, capital gains tax, or other fees there so they're subtracted from your gain before ROI and annualized return are calculated.
Worked example: a $10,000 investment that grows to $15,000 over 3 years with no additional costs has a net gain of $5,000 and an ROI of 50%. Annualized, that's (15,000 ÷ 10,000)^(1/3) − 1 ≈ 14.47% per year — useful context for comparing against, say, a compound interest account advertising a fixed annual rate. For a deeper look at how contributions and compounding play out over time, see the Investment Calculator.
To solve for rate, term or payment rather than return, use the Finance Calculator; for coupon-paying instruments see the Bond Calculator. ROI ignores when the money arrives, which flatters slow returns — the present value calculator puts multi-year returns back on a like-for-like footing with today’s money.