ROI
Calculator

Return on Investment (ROI) is a percentage that measures how much profit or loss you made relative to the amount you invested. A 50% ROI means you earned $0.50 for every $1 invested. ROI does not account for time — a 50% ROI over 1 year is far better than a 50% ROI over 10 years. Use the annualized return (CAGR) to compare investments with different holding periods.

ROI = (Final Value − Initial Investment) ÷ Initial Investment × 100. For example: if you invested $10,000 and it grew to $15,000, ROI = ($15,000 − $10,000) ÷ $10,000 × 100 = 50%. A negative ROI means the investment lost value.

CAGR (Compound Annual Growth Rate) is the annualized rate of return that would turn your initial investment into your final value over the holding period, assuming compounding. The formula is: CAGR = (Final Value ÷ Initial Investment)^(1 ÷ Years) − 1. Unlike ROI, CAGR accounts for the time value of money. A 50% ROI over 10 years equals a CAGR of about 4.1%, which is quite modest compared to a 50% ROI over 2 years (CAGR of 22.5%).

A good ROI depends on the asset class, time period, and risk level. The S&P 500 has historically returned about 10% per year (CAGR), so a long-term stock investment with a CAGR above 10% beats the market. Real estate investors often target 8–15% annualized returns. For business investments, ROI expectations vary widely. Always compare your ROI or CAGR against a relevant benchmark for the same time period.

Yes. A negative ROI means your final value is less than your initial investment — you lost money. For example, if you invested $10,000 and the investment is now worth $7,000, your ROI is −30%. Negative CAGR values work similarly. When the final value is zero, ROI is −100%, meaning a total loss.

ROI is a cumulative percentage — it tells you the total return over the entire period, without regard to how long you held the investment. Annualized return (CAGR) converts that total return into an equivalent per-year rate. This makes it possible to compare a 3-year investment against a 7-year investment on the same scale. Always use CAGR when comparing investments held for different durations.

No. This calculator computes pre-tax ROI based purely on the values you enter. Actual after-tax returns will be lower and depend on whether the gain is classified as short-term or long-term, your income tax bracket, and applicable state taxes. For accurate after-tax return calculations, consult a CPA or tax advisor — especially for investments held inside an LLC, where pass-through taxation rules apply.

LLC owners can use this ROI calculator to evaluate investments made through the LLC — whether in equipment, marketing campaigns, real estate, or financial assets. Enter the total cash deployed (including LLC formation and maintenance costs if evaluating the LLC itself) as the initial investment. When comparing LLC investments to personal investments, remember to account for the tax treatment differences: LLC income may be subject to self-employment tax, while qualified dividends and long-term capital gains receive preferential rates.