ROI Calculator
Calculate return on investment as a percentage from cost and final value.
Return on investment (ROI) tells you how much you gained or lost relative to what you put in. Enter your initial cost and the final value to see the profit and the ROI percentage — a quick way to compare how well different investments or purchases performed.
Formula / method
Examples
50%
−10%
How return on investment is measured
ROI expresses your gain or loss as a percentage of what you put in: profit divided by the initial cost. It is deliberately simple, which makes it a fast way to compare very different opportunities on a like-for-like basis.
What ROI leaves out
Plain ROI ignores time, so a 50% return in one month and 50% over five years look identical even though one is far better. For investments held over several years, an annualized measure such as CAGR gives a fairer comparison. ROI also excludes fees, taxes and risk, so treat it as a headline figure rather than the whole story.
Where it's used
- Comparing the profit of different investments or purchases as a percentage
- Measuring the payoff of a marketing campaign against its spend
- Assessing the return on a property purchase or renovation
- Evaluating a business project or equipment purchase
- Comparing a stock or crypto trade's gain relative to the amount invested
Real-world examples
- Buying at 1,000 and selling at 1,500 gives a 500 profit and a 50% ROI.
- A marketing campaign costing 2,000 that returns 1,800 in sales shows a -10% ROI, a net loss.
- Renovating a rental for 20,000 that raises its value by 35,000 yields a 75% ROI.
A bit of history
The return-on-investment formula was pioneered in 1912 by Donaldson Brown, then an engineer and salesman at the DuPont company, who broke ROI down into profit margin multiplied by asset turnover. The approach is still taught today as the DuPont formula.
Did you know?
Plain ROI ignores time, so a 50% return earned in one month and a 50% return over ten years look identical. That is why analysts also use time-weighted measures such as CAGR to compare investments of different lengths.
FAQ
Does ROI account for time?
No. Plain ROI ignores how long the investment took. To compare investments of different lengths, look at annualized ROI (divide the gain across the years).