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ROI Calculator

Calculate return on investment and annualised return from an initial investment.

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FAQs

What is a good ROI?

A good ROI depends on the investment type and risk. The S&P 500 historically returns around 10% per year. Real estate averages 8–12%. Savings accounts offer 1–5%. Any investment should be compared against alternatives of similar risk — a higher return often comes with higher risk.

Why is annualised ROI more useful than simple ROI?

Simple ROI does not account for how long the investment was held. A 50% return over 10 years is very different from a 50% return over 1 year. Annualised ROI (also called CAGR — Compound Annual Growth Rate) normalises returns to a per-year basis, enabling fair comparisons between investments of different durations.

Does ROI account for inflation?

Standard ROI is a nominal return — it does not adjust for inflation. Real ROI subtracts the inflation rate from the nominal return. If your investment returned 8% but inflation was 3%, your real return was approximately 5%. For long-term investments, real return is the more meaningful measure.