ROI Calculator — Complete Guide 2026
Return on Investment (ROI) is the most universal metric to measure how well an investment performed. Whether it's stocks, real estate, a business, or any other asset — ROI tells you exactly what you got back for every dollar you put in.
⚡ ROI Quick Reference
ROI formula(Net Profit ÷ Cost) × 100
Annualized ROI (CAGR)(Final/Initial)^(1/years) − 1
S&P 500 historical avg~10%/yr
"Good" ROI (stocks)>10%/yr
"Good" ROI (real estate)>8%/yr
Break-even ROI0% (no gain, no loss)
ROI vs Annualized ROI — Which Should You Use?
Simple ROI tells you the total return, but doesn't account for how long the investment took. A 50% ROI in 1 year is much better than 50% over 10 years.
Annualized ROI (CAGR) converts the total return into a yearly rate, making it easy to compare any two investments regardless of how long they were held. Always use annualized ROI when comparing.
What Is a Good ROI?
- Stocks / ETFs: Anything above 10%/yr (S&P 500 average) is excellent. 7–10% is solid.
- Real Estate: 8–12%/yr including appreciation and rental income is considered strong.
- Business: 15–25%+ is typical for successful small businesses. Varies widely by industry.
- Bonds / Fixed Income: 3–5%/yr is normal. Low risk, low return.
- Minimum bar: Your ROI must beat inflation (~3%/yr) or you're losing purchasing power.
What is the difference between ROI and CAGR?+
ROI = total return as a percentage (e.g., you made 80% total). CAGR (Compound Annual Growth Rate) = what annual return would produce that same total return over the same time. Example: 80% ROI over 6 years = 10.4% CAGR. CAGR is more useful for comparing investments because it normalizes for time.
Does ROI include dividends or rental income?+
Standard ROI can include or exclude income depending on what you enter. In this calculator, use the "Additional Income" field to add dividends, rental income, or any other cash flows you received. The calculator adds this to your net profit for a complete total return calculation.
Why doesn't ROI account for risk?+
ROI only measures return, not how much risk was taken to achieve it. A 20% ROI from a savings account (very low risk) is much better than 20% from a volatile cryptocurrency (very high risk). For risk-adjusted return, look at the Sharpe Ratio, which compares return to volatility.