ROI Calculator

Calculation Results

Initial Investment: $8,000.00
Return Amount: $12,000.00
Total Gain on Investment: $4,000.00
Time Period (Years): 2.00
Return on Investment (ROI): 50.00%
Simple Annual (ROI): 25.00%
Compound Annual Growth Rate (CAGR): 22.47%

Calculation Formulas

ROI = Return Amount - Initial InvestmentInitial Investment × 100

Simple Annual ROI = ROITime Period

CAGR = (Return AmountInitial Investment)(1Time Period) - 1

Example Calculation

Initial Investment: $5,000

Return Amount: $7,500

Time Period: 3 years

ROI = ($7,500 - $5,000) / $5,000 * 100 = 50%

Simple Annual ROI = 50% / 3 = 16.67%

CAGR = ($7,500 / $5,000)^(1 / 3) - 1 = 14.47%

Investment Breakdown

What is ROI？

Return on Investment (ROI) is a financial metric that can be used to assess the profitability of an investment. It can be used to help investors understand the efficiency of their investments by comparing the returns obtained from different investment opportunities.

What is ROI Calculator

With initial investment amount, finally return amount and investment period, the calculator is able to quickly and accurately calculate ROI.This tool is useful for both of novice and experienced investors as it saves time and ensures accuracy when evaluating the performance of an investment.

How does the ROI calculator work?

The ROI calculator bases on initial investment and the amount of return, and duration of the investment. The following formula calculates the ROI:

ROI = (Return Amount - Initial Investment) / Initial Investment × 100

In addition to basic ROI, the ROI Calculator can also calculate Simple Annual ROI and Compound Annual Growth Rate (CAGR) . Then the investors can analyze investment performance more comprehensively.

How to use ROI Calculator？

ROI calculator is very simple to use:

  1. Input your initial investment amount.
  2. Input the final return amount, which is the value you gain from your investment.
  3. Select the time period type: number of years or date range.
  4. If you choose option Number of Years, you should input the number of years with the investment. If you choose Date Range, input the start and end dates of the investment.
  5. Click the "Calculate ROI" button to view the results.

Benefits

ROI Calculation Example

If you invest $5,000 into a stock, the value of your investment will increase to $7,500 after 3 years.

The ROI is calculated as follows:

ROI = ($7,500 - $5,000) / $5,000 × 100 = 50%

Assuming linear growth, the simple annualized rate of return is calculated as follows:

Simple Annual Return = 50% / 3 = 16.67%

Considering the compounding effect over a 3-year period, the CAGR is calculated as follows:

CAGR = ($7,500 / $5,000)^(1 / 3) - 1 = 14.47%

This example shows how the ROI Calculator can help you understand the profitability and growth rate of your investment over time, enabling you to make more informed financial decisions.