ROI Calculator
Calculate return on investment for any purchase, project, or investment. Compare simple ROI and annualized returns (CAGR).
Simple ROI Calculator
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Break-Even Calculator
How much do you need to earn to break even?
What is ROI?
Return on Investment (ROI) is a financial metric that measures the profitability of an investment relative to its cost. It is expressed as a percentage and is one of the most widely used metrics in business and investing.
The formula is: ROI = ((Final Value − Initial Investment) ÷ Initial Investment) × 100. For example, if you invest $10,000 and sell for $15,000, your ROI is ((15,000 − 10,000) ÷ 10,000) × 100 = 50%.
A positive ROI means the investment gained value; a negative ROI means it lost money. ROI does not account for the time period of the investment, which is why annualized ROI (CAGR) is often more useful for comparing investments held over different periods.
ROI vs CAGR — What's the Difference?
Simple ROI tells you the total percentage return regardless of how long you held the investment. A 100% return over 2 years and 100% over 20 years both show the same ROI, but the first is clearly a better investment.
CAGR (Compound Annual Growth Rate) solves this by normalizing returns to a per-year basis. The formula is: CAGR = (Final Value ÷ Initial Value)1/years − 1. This makes it easy to compare investments of different durations on an apples-to-apples basis.
For example, $10,000 growing to $20,000 over 7 years has a total ROI of 100%, but a CAGR of only 10.41%. This tells you the investment grew at an equivalent rate of 10.41% compounded annually.
Common Investment ROI Benchmarks
| Investment Type | Avg. Annual Return | $10k after 10 years | $10k after 30 years |
|---|---|---|---|
| S&P 500 Index | ~10.7% | $27,590 | $21,002* |
| Stock Market (general) | ~10% | $25,937 | $174,494 |
| Real Estate | ~8.6% | $22,824 | $118,924 |
| Corporate Bonds | ~5.5% | $17,081 | $49,840 |
| High-Yield Savings | ~4.5% | $15,530 | $37,453 |
| Inflation (US avg.) | ~3.2% | $13,685 | $25,631 |
* S&P 500 30-year figure: $210,024. All figures assume annual compounding, no additional contributions. Past performance does not guarantee future results.
Frequently Asked Questions
- What is ROI and how do I calculate it?
- ROI = ((Final Value − Cost) ÷ Cost) × 100. For example, investing $5,000 and receiving $7,500 gives an ROI of ((7,500 − 5,000) ÷ 5,000) × 100 = 50%.
- What is the difference between ROI and CAGR?
- ROI measures total return regardless of time. CAGR (Compound Annual Growth Rate) normalizes returns to a per-year rate, making it better for comparing investments held over different time periods.
- What is a good ROI?
- It depends on the investment type and risk. The S&P 500 averages ~10-11% per year. Real estate averages ~8-12%. A high-yield savings account offers ~4-5%. Higher risk typically demands higher returns.
- How do I calculate annualized ROI?
- CAGR = (Final Value / Initial Investment)^(1/Years) − 1. For $10,000 growing to $20,000 in 7 years: (20000/10000)^(1/7) − 1 = 10.41% per year.
- What is break-even ROI?
- Break-even is 0% ROI — your revenue exactly equals your costs. To break even, your minimum revenue must equal your total costs. Any amount above that is profit.