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ROI Calculator

Use this ROI calculator to measure the total and annualized return on any investment. Enter your initial investment, final value, time period, and dividends received to see your total gain, percentage return, and annualized performance.

The total amount you invested at the beginning, including any purchase fees or commissions.

The current or sale value of your investment, not including dividends which are entered separately.

The number of years you held the investment. Use decimals for partial years, such as 1.5 for 18 months.

The total dividends, distributions, or interest income received over the entire holding period. Enter the cumulative total, not the annual amount.

Return on investment is the most fundamental measure of investment performance. This calculator computes both the total ROI and the annualized ROI, which allows you to compare investments held for different lengths of time. Include dividend or distribution income to see your true total return, not just capital appreciation.

How It Works

ROI and Annualized Return Formula

Total ROI = ((Final Value + Dividends - Initial) / Initial) x 100; Annualized ROI = ((1 + Total ROI / 100)^(1/Years) - 1) x 100

Total ROI is the percentage gain including capital appreciation and dividends relative to your initial investment. Annualized ROI converts this to an equivalent annual compound rate so you can compare investments across different time periods.

The total dollar return is the sum of capital gain (final value minus initial investment) and total dividends received.

Total ROI expresses this dollar return as a percentage of your initial investment.

Annualized ROI uses the compound annual growth rate formula to convert the total return into an equivalent yearly rate.

Annualized ROI is essential for comparing investments held for different lengths of time.

A negative total ROI indicates an overall loss on the investment.

Important Notes:

  • •This calculator assumes a single initial investment with no additional contributions during the holding period.
  • •Dividends are treated as a lump sum received over the entire period rather than reinvested along the way.
  • •For investments with regular additional contributions, a more sophisticated time-weighted return calculation would be needed.
  • •The annualized ROI assumes smooth compound growth, which is a simplification of actual market returns that fluctuate year to year.

Worked Example

An investor buys $10,000 of stock, and after 3 years the investment is worth $15,000 with no dividends received.

Inputs:

  • initial Investment:10,000
  • final Value:15,000
  • investment Years:3
  • annual Dividends:0

Result:

The capital gain is $5,000, giving a total ROI of 50.00%. The annualized ROI is approximately 14.47%, meaning the investment grew at an equivalent rate of about 14.47% per year compounded annually over the 3-year period.

Who Is This Calculator For?

  • individual investors
  • portfolio managers
  • business owners evaluating projects
  • anyone measuring financial performance

Frequently Asked Questions

Total ROI is the overall percentage gain or loss over the entire holding period. Annualized ROI converts this into an equivalent annual rate, making it possible to compare investments held for different lengths of time. A 50% total return over 5 years is very different from 50% over 1 year.
Yes. Dividends are a real component of your investment return. Excluding them understates your actual performance. Total return, which includes both capital appreciation and income, gives the most accurate picture of how an investment has performed.
Annualized ROI and Compound Annual Growth Rate, or CAGR, are essentially the same calculation. Both express the equivalent annual compound return over a given period. The terms are often used interchangeably in investing contexts.
A good ROI depends on the investment type and risk level. The S&P 500 has historically returned about 10% per year before inflation. Bonds typically return 4-6%. Real estate varies widely. Any return above the risk-free rate like Treasury yields generally indicates some value creation.
No. This calculator shows pretax returns. Your actual after-tax return depends on your tax bracket, how long you held the investment, and the type of account. Long-term capital gains are generally taxed at lower rates than short-term gains. Dividends may be taxed as qualified or ordinary income.
Yes. ROI is widely used in business to evaluate projects, marketing campaigns, equipment purchases, and other capital expenditures. Enter the initial cost as the initial investment and the value of returns generated as the final value.

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Last updated: April 11, 2026