The ROI formula
Return on investment (ROI) expresses your gain or loss as a percentage of what you put in: ROI% = (final value − amount invested) ÷ amount invested × 100. A positive ROI means a profit, a negative ROI means a loss. Because it is a ratio, ROI lets you compare investments of very different sizes on equal footing — a $300 gain on $1,000 (30%) is a better return than a $300 gain on $10,000 (3%). Spread over several years, that same return is better expressed with the CAGR calculator.
How to use this calculator
Enter the amount invested (your total cost) and the final value (what the investment is worth now or what you sold it for). The tool returns the ROI percentage and the net profit or loss. ROI does not account for how long the money was invested — to compare returns across different time spans, pair it with an annualized measure or the future value calculator. How long the money takes to come back is answered by the payback period calculator.
Worked example and limitations
You invest $1,000 and the position grows to $1,300. ROI = (1,300 − 1,000) ÷ 1,000 × 100 = 30%, a profit of $300. Here are a few outcomes for the same $1,000 stake:
| Final value | Profit | ROI |
|---|---|---|
| $800 | -$200 | -20% |
| $1,100 | $100 | 10% |
| $1,300 | $300 | 30% |
| $2,000 | $1,000 | 100% |
ROI ignores time, fees, taxes, and risk. Two 30% returns are not equal if one took one year and the other took ten. These figures are an estimate for general information only and are not financial advice; consult a qualified professional before making money decisions. For a company rather than a project, the return on equity calculator is the closer fit.
Frequently asked questions
- How do I calculate ROI?
- Subtract the amount invested from the final value, divide by the amount invested, and multiply by 100. The result is your return on investment as a percentage.
- What is a good ROI?
- It depends on the investment and time frame. A higher ROI is better, but always weigh it against how long your money was tied up and the risk involved.
- Does ROI account for time?
- No. Basic ROI is a single-period ratio and ignores how long the money was invested. Use an annualized return to compare investments held for different periods.
- What is the ROI on turning $1,000 into $1,300?
- The ROI is 30%: (1,300 − 1,000) ÷ 1,000 × 100, a net profit of $300.
- Should fees and taxes be part of the amount invested?
- Yes, if you want a realistic number. Add commissions, platform fees and any purchase costs to the amount invested, and use the after-tax proceeds as the final value. Leaving them out is the usual reason a real-world return falls short of the ROI shown here.