Investment Return (ROI) Calculator

Determine the total return and annualized rate of return on your investment.
Includes purchase price and any initial fees.
Current value plus any dividends/payouts received.

Investment Return Analysis

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Total ROI (%)
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Annualized Rate of Return (%)

Interpretation

The annualized rate allows you to compare performance against other investments.

Calculating Your True Return on Investment (ROI)

The **Investment Return Calculator** is the standard tool used to evaluate the performance of any investment, from stocks to real estate. **Return on Investment (ROI)** measures the efficiency of your investment by dividing the net profit by the initial cost. It is often expressed as a **total return percentage**. This calculator also determines the critical **annualized rate of return**, which standardizes the return over a yearly period.

The ROI and Annualized Rate Formulas

The calculation involves two main formulas:

  1. $$\text{ROI} (\%) = \frac{(\text{Final Value} - \text{Initial Cost})}{\text{Initial Cost}} \times 100$$
  2. $$\text{Annualized Rate} = [(1 + \text{Total Return})^{\frac{1}{\text{Years}}}] - 1$$

The **total return percentage** shows the raw gain/loss, while the **annualized rate of return** is essential for comparing investments with different holding periods (e.g., comparing a 5-year investment to a 10-year investment).

Financial Analysis and Investment Growth

A positive **ROI** indicates a successful investment. A negative **ROI** means the investment resulted in a loss. The **annualized rate of return** provides the clearest benchmark for assessing **investment growth** against market indices, long-term savings goals, and other asset classes. Use this **ROI calculator** to perform quick, accurate **financial analysis**.

Investment Return FAQs

What is the difference between Total ROI and Annualized Rate of Return?

**Total ROI** is the overall **total return percentage** gained or lost over the investment period. The **annualized rate of return** smooths that return into an equivalent yearly percentage, making it the superior metric for comparative **financial analysis**.

What should be included in the Initial Investment Cost?

The **Initial Investment Cost** should include everything you paid to acquire the asset: the purchase price, commissions, fees, and closing costs. Including all these costs provides an accurate basis for calculating the true **ROI**.

Why is it important to calculate ROI for every investment?

Calculating **ROI** is the only way to objectively measure **investment growth** and efficiency. It allows you to identify high-performing assets and cut losses on poor performers, refining your overall **financial analysis** strategy.