Complete guide: Investment ROI
Updated:
ROI compares net profit with invested capital. Investing 1,000 and recovering 1,200 without other costs produces a 200 profit and 20% ROI. A loss produces a negative return; recovering nothing means losing 100% of invested capital.
This calculator adds costs to initial investment and additional income to final value. Enter dividends, rents or other income as the total over the holding period, not a monthly amount. Do not subtract the same costs from final value and also enter them in costs, because that would count them twice.
Annualized return uses a root based on the holding period to compare different durations; it is not simply ROI divided by years. It treats cash flows as one initial outflow and one final inflow. For intermediate deposits or receipts use a dated IRR; this figure is not IRR and does not adjust inflation, risk or taxes not entered.
How it works
- 1Invested = initial investment + costs; proceeds = final value + income.
- 2Profit = proceeds − invested; ROI = profit ÷ invested × 100.
- 3Annualized return = [(proceeds ÷ invested)^(1/years) − 1] × 100.
Frequently asked questions
What does a negative ROI mean?
You recovered less than invested capital including costs. A −20% ROI means losing 20% of that capital.
Are ROI and annualized return the same?
No. ROI covers the entire period; annualized return expresses the equivalent annual compound rate under the stated assumptions.
Where do I include dividends and fees?
Total dividends go under additional income and fees under costs. Use one currency and avoid counting a charge twice.