ClaruSite
📊 Business & Ecommerce

ROI Calculator · Return on Investment & Annualized Return

Return on investment (ROI) answers one question: for every dollar you put in, how many dollars did you get back after covering every cost? It is the most common yardstick for comparing a rental property, a business purchase, a marketing campaign, a piece of equipment or a stock position, because it reduces very different projects to a single percentage.
A trustworthy ROI counts everything you paid, not only the purchase price. Closing costs, brokerage and platform fees, repairs, shipping, taxes you owed on the sale and the cost of any money you borrowed all belong in the total cost. Leaving them out is the most frequent reason an investment looks better on paper than it was in your bank account. This calculator has a separate field for those extra costs so they are never forgotten.
ROI has one blind spot: it ignores time. A 40% return earned in one year is excellent; the same 40% earned over ten years is mediocre. Enter the holding period and the calculator also shows the annualized return (the compound annual growth rate, or CAGR), which lets you compare investments held for different lengths of time. If the money comes in or goes out in several installments, use the NPV and IRR calculator instead.
Standard: 10000
What the investment is worth or paid back
Fees, taxes, repairs or other costs
Optional: adds the annualized return
Holding Period:

Detailed Breakdown

5 metrics
PRIMARY RESULT
42.86%
Return on Investment (ROI)
Net Profit
$4,500.00
Annualized Return Over 3 Years (CAGR)
12.62%
Total Cost (Invested + Extra Costs)
$10,500.00
Multiple on Invested Money
1.43x

Related Calculators

4 tools
Freelance Rate Calculator · Hourly Rate to Hit Your Income Goal
Business & Ecommerce
Open
NPV & IRR Calculator · Net Present Value and Internal Rate of Return
Business & Ecommerce
Open
Break-Even Calculator · Break-Even Point in Units and Revenue
Business & Ecommerce
Open
Federal Income Tax Calculator 2026 — IRS Brackets & Deductions
Taxes & Income
Open

Calculation Formula

Standard Method

Total Cost = Amount Invested + Additional Costs Net Profit = Final Value − Total Cost ROI (%) = Net Profit ÷ Total Cost × 100 Annualized Return (CAGR, %) = [ (Final Value ÷ Total Cost) ^ (1 ÷ Years) − 1 ] × 100 Multiple on Invested Money = Final Value ÷ Total Cost ROI is a simple, undiscounted ratio. The annualized figure assumes the whole return compounds smoothly over the holding period, which is the standard way to compare investments of different lengths.

Benchmark Example:
Suppose you invest $10,000 in a small rental renovation, spend another $500 on fees, and sell for $15,000 three years later: • Total Cost: $10,000 + $500 = $10,500 • Net Profit: $15,000 − $10,500 = $4,500 • ROI: $4,500 ÷ $10,500 = 42.86% • Multiple on invested money: $15,000 ÷ $10,500 = 1.43x • Annualized return over 3 years: (15,000 ÷ 10,500)^(1/3) − 1 = 12.62% per year A 42.86% ROI sounds impressive, but 12.62% per year is the number to compare with a savings account, an index fund or another project.

Behind this is dedication and a desire to help

ClaruSite is 100% free and independent. Your support helps keep these financial tools fast, accurate, and available to everyone.

PayPalDonate with PayPal

Frequently Asked Questions

6 answers

Applicable Laws & Regulatory Standards

Federal Trade Commission

Official Legal Reference
FTC Act — Section 5 (15 U.S.C. § 45)

Prohibits unfair or deceptive acts in commerce. Advertised return or earnings figures must be truthful and backed by a reasonable basis, which is why an honest ROI counts every cost.

FTC Business Opportunity Rule — 16 CFR Part 437

Requires sellers of business opportunities to substantiate any earnings claim and to disclose the basis for it, a standard that applies to the profit figures a prospective buyer relies on.

FTC Guides Concerning the Use of Endorsements and Testimonials — 16 CFR Part 255

Requires that results shared in testimonials reflect what typical consumers can expect or are clearly disclosed as atypical, relevant when ROI results are used in marketing.

Legal citations and statutes are provided for consumer transparency, analytical validation, and educational reference under U.S. consumer financial regulations. This tool is not a substitute for formal legal, accounting, or tax counsel.

💡

Found an error or have a suggestion?

Help us calibrate this tool for US regulations and consumer standards.

Send Feedback
exploreReal-World Scenarios

When to Use This Calculator

Everyday financial situations where this tool gives you fast, accurate clarity:

📈

Compare Different Investments

Turn a stock sale, a rental flip and a business purchase into one comparable percentage, including every fee and cost.

⏱️

See the Annualized Return

Add the holding period to find out what the investment earned per year, so a quick win and a long hold can be compared fairly.

🏠

Evaluate a Project or Purchase

Check whether a renovation, a piece of equipment or a marketing budget paid for itself and by how much.

🧾

Spot Hidden Costs

Enter fees, taxes and repairs as additional costs and watch how much they reduce the return you thought you had.

Related Calculators for Better Decisions
Freelance Rate Calculator · Hourly Rate to Hit Your Income GoalNPV & IRR Calculator · Net Present Value and Internal Rate of ReturnBreak-Even Calculator · Break-Even Point in Units and RevenueEstimate your federal tax bracket and effective rate