Free Return on Investment (ROI) Calculator: Measure Your Investment Performance

Use the ROI Calculator to f‌rac Annual Returns by Cost of Investment, then multiply by 100. A $8,000 return on a $16,000 cost equals 50 % ROI. The long-term average annual return of the S&P 500 is about 10 % (Damodaran, 2023).

Return on Investment Calculator

Enter the total annual returns in USD

Enter the total cost of investment in USD

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How to use the tool

  1. Type your annual returns. Example 1: $8,000. Example 2: $12,300.
  2. Enter total cost of investment. Example 1: $16,000. Example 2: $27,000.
  3. Press “Calculate ROI” to see the percentage.

Formula

$$ ROI = rac{\text{Annual Returns}}{\text{Cost of Investment}} \times 100\% $$

Example 1
  • Annual Returns: $8,000
  • Cost of Investment: $16,000
  • ROI: $$ rac{8,000}{16,000}\times100 = 50\% $$
Example 2
  • Annual Returns: $12,300
  • Cost of Investment: $27,000
  • ROI: $$ rac{12,300}{27,000}\times100 \approx 45.56\% $$

Quick-Facts

  • S&P 500 long-term average return ≈ 10 % yearly (Damodaran, 2023).
  • Corporate hurdles often start at 12 % ROI (McKinsey, “Cost of Capital” 2022).
  • Negative ROI signals capital loss (Investopedia, ROI, 2024).
  • Inflation erodes real ROI; U.S. CPI averaged 2.5 % since 1990 (BLS Data, 2023).
  • Time-adjusted metrics like IRR include cash-flow timing (CFA Curriculum Level I, 2023).

FAQ

What is ROI?

ROI is the percentage return you earn relative to the money invested (Investopedia, ROI, 2024).

How does the calculator work?

It divides returns by cost, multiplies by 100, and shows the percentage instantly—no time factor included.

When is ROI considered good?

Many analysts flag ≥7 % as solid for long-term diversified portfolios (Vanguard Market Outlook 2023).

Can ROI be negative?

Yes. A negative output indicates your investment lost money (Morningstar, Guide 2023).

Does ROI include risk?

No. ROI ignores volatility; pair it with Sharpe ratio for risk insight (Sharpe, 1966).

How often should I check ROI?

Long-term investors review annually; active traders review monthly (FINRA, Investor Tips 2023).

Is tax considered in ROI?

Not by default. Subtract taxes from returns first for an after-tax ROI (IRS Publication 550, 2023).

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