ROI Calculator
Total return, annualized rate, and profit from invested cost, end value, and years held.
What it does
Return on investment answers whether money worked hard: profit divided by what went in. A 50% total sounds strong until it spans a decade, which is why the annualized rate sits beside it on every serious comparison.
The tool above takes invested cost, end value, and holding years. It returns total return percent with the annualized compound rate and the dollar profit beside them.
The default of $10,000 growing to $15,000 over 5 years gains +$5,000.00 at +50.00% total, which annualizes to +8.45 %/yr. The same doubling of $1,000 to $2,000 over 10 years annualizes to only +7.18 %/yr.
The treatment follows SEC investor education on costs and compounding with FINRA buying and selling guidance matching the fee logic. Both stress that commissions, spreads, and taxes reduce the round trip before any rate is quoted.
How to use
- Enter the all in amount invested at the start.
- Enter the end value received or projected.
- Enter the full holding period in years.
- Read total return first for the whole trip.
- Read annualized to compare trips of different lengths.
Formula
- cost
- All in starting amount invested.
- end
- Value received at exit.
- years
- Holding period smoothing the annual rate.
Annualized is geometric, not total divided by years: +50% over 5 years is +8.45 %/yr, not 10. Losses annualize the same way, so -20% over 2 years reads -10.56 %/yr.
Worked example
Example: $10,000 to $15,000 in 5 years
Defaults: cost 10000, end value 15000, years 5.
- Profit: 15,000 - 10,000 = +$5,000.00.
- Total: 5,000 / 10,000 x 100 = +50.00%.
- Annualized: 1.5^(1/5) - 1 = 0.08447 = +8.45 %/yr.
- Check: 1.08447^5 = 1.50, which rebuilds the 50% total.
- Tool shows +50.00 %, +8.45 %/yr, +$5,000.00.
Reference table
| Trip | Total | Annualized |
|---|---|---|
| $10,000 to $15,000 in 5 years | +50.00 % | +8.45 %/yr |
| $1,000 to $2,000 in 10 years | +100.00 % | +7.18 %/yr |
| $5,000 to $4,000 in 2 years | -20.00 % | -10.56 %/yr |
Limits
- Price moves only; dividends and interest need their own lines.
- Fees, spreads, and taxes excluded from both ends.
- Inflation excluded: nominal rates flatter long trips.
- Single lump sum assumed; drip contributions need XIRR math.
Common mistakes
- Dividing total return by years instead of annualizing geometrically.
- Comparing totals across different holding periods.
- Forgetting fees on both ends of the trip.
- Quoting pre tax gains as take home.
- Annualizing over months without converting to years first.
Try it yourself
Quick checks. Answers sit tucked under each question.
$5,000 to $4,000 over 2 years?
-$1,000.00 at -20.00% total, -10.56 %/yr annualized.
Doubling in 10 years annualizes to?
+100.00% total, +7.18 %/yr (2^0.1 - 1).
Zero cost entered?
Rejected: enter an invested cost above 0.
Questions
How do I calculate ROI?
Profit over cost times 100. $10,000 to $15,000 is +50.00%.
Total versus annualized?
Total covers the whole trip; annualized spreads it per year geometrically for fair comparison.
Can ROI be negative?
Yes, shown with a minus sign. $5,000 to $4,000 reads -20.00%.
Why not divide by years?
Compounding multiplies, so the correct bridge is the root, not division. +50% over 5 years is +8.45 %/yr, not 10.
Are fees included?
No. Fold commissions into cost and end value first, then run the tool.
What about dividends?
Add cash received to the end value for total return on the position.