Work out the return on any investment, and see how to calculate ROI over multiple years as a yearly rate. Enter what you put in, what it’s worth now and how long you held it to get net profit, total ROI and annualized ROI.
Results update automatically as you type. A negative ROI means a loss.
How to Calculate ROI Over Multiple Years
Divide the final value by the amount invested, take the root for the number of years, then subtract 1. If $10,000 grows to $15,000 in 3 years, total ROI is 50%, and 1.5^(1/3) − 1 gives an annualized ROI of about 14.5% a year. The same 50% means very different things over different periods:
| Total ROI | Years held | Annualized ROI |
|---|---|---|
| 50% | 1 | 50.0% |
| 50% | 2 | ≈ 22.5% |
| 50% | 3 | ≈ 14.5% |
| 50% | 5 | ≈ 8.5% |
| 50% | 10 | ≈ 4.1% |
- Divide final value by amount invested: $15,000 ÷ $10,000 = 1.5.
- Raise it to the power of 1 ÷ years: 1.5^(1/3) ≈ 1.1447.
- Subtract 1 and multiply by 100: about 14.5% a year.
How to Calculate ROI Percentage
Take the gain, divide it by what you put in, and multiply by 100. If you add a holding period, the tool also turns that into a yearly rate.
Formula: ROI (%) = (Final Value − Amount Invested) ÷ Amount Invested × 100. When a holding period is entered, Annualized ROI (%) = [(Final Value ÷ Amount Invested)^(1 ÷ years) − 1] × 100. That second line is the annualized return on investment formula, the same one used for CAGR.
- Amount invested: what you paid or put in.
- Final value: what it’s worth now, or what you got when you sold.
- Holding period: years held, used only for the annualized rate (optional).
- Net profit: final value minus amount invested.
ROI Calculation Examples
| Amount Invested | Final Value | Holding Period | Total ROI | Annualized ROI |
|---|---|---|---|---|
| $10,000 | $15,000 | 3 yrs | +50.0% | ≈+14.5% |
| $5,000 | $4,000 | 2 yrs | -20.0% | ≈-10.6% |
| $20,000 | $26,000 | 4 yrs | +30.0% | ≈+6.8% |
| $8,000 | $8,000 | 5 yrs | 0.0% | 0.0% |
| $2,000 | $6,000 | 10 yrs | +200.0% | ≈+11.6% |
The second row shows what a negative ROI means in practice: the investment is worth less than you paid, here a 20% loss, or about 10.6% a year.
Mistakes that inflate your ROI
Most inflated returns come from leaving something out:
- Leaving out costs. Fees, commissions, taxes, repairs and maintenance all belong in the amount invested; skip them and the result overstates your gain.
- Ignoring time. A 50% total return over ten years is far weaker than 50% in two, which is why the annualized figure matters more when comparing options.
- Forgetting income along the way. Dividends, rent or interest you received should be added to the current value.
ROI also measures return, not risk, so compare like with like. When money goes in or comes out at several points, internal rate of return fits better than a simple ROI. The return on investment article on Wikipedia explains the formula and its limits.
Common questions about ROI
How do you calculate ROI over multiple years?
Divide the final value by the amount invested, raise that to the power of 1 ÷ years, subtract 1 and multiply by 100. $10,000 growing to $15,000 in 3 years gives 1.5^(1/3) − 1, or about 14.5% a year.How do you calculate ROI percentage?
Subtract the amount invested from the final value, divide by the amount invested and multiply by 100. $10,000 that becomes $15,000 is $5,000 ÷ $10,000 × 100 = 50%.Why is my annualized ROI so much lower than my total ROI?
Annualized ROI spreads your total return across the holding period as a compounding rate. Over multi-year holds it is much smaller than the raw total ROI, since total ROI isn’t adjusted for time at all.What does a negative ROI mean?
A negative ROI means the final value is lower than the amount you invested, so you made a net loss. The percentage shows how large that loss is relative to your original investment.Does ROI factor in fees, dividends, or taxes?
No. The calculator only compares the amount invested to the final value you enter, so fold reinvested dividends, fees and taxes into those figures yourself before entering them.How is annualized ROI different from CAGR?
They’re the same calculation. The annualized ROI shown here is a compound annual growth rate over your holding period, turning a total gain or loss into an equivalent constant yearly rate.Related Calculators
To dig deeper into a specific return, you can work out a compound annual growth rate directly, estimate income from dividend-paying holdings, or, if the investment is a rental unit, run the numbers through a rental property ROI calculator built for real estate cash flow. See also the Whatnot Fee Calculator. See also the Poshmark Fee Calculator. See also the Depop Fee Calculator. You may also find the StockX Fee Calculator useful. You may also find the App Store Keyword Character Counter useful.