ROI Calculator — Return on Investment & Annualised CAGR

ROI (Return on Investment) is the universal benchmark for whether something was worth it. Marketing campaigns, business expansions, real estate flips, equipment purchases — all of them get measured against the question: “How much did I get back per dollar spent?” This calculator does both raw ROI and annualised CAGR, because time is what separates a great investment from a slow one.

ROI Calculator

Compute total ROI and annualised return on any investment — business, real estate, marketing campaign, or project.

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ROI Analysis

ROI %–
Annualised ROI (CAGR)–
Net Profit–
Multiple of Money (MoM)–
Beats Inflation? (assumes 5%)–

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ROI vs Annualised Return

A 50% ROI sounds great — but over how long? Earned in 1 year, that’s an excellent 50% CAGR. Earned over 10 years, it’s only a 4.1% CAGR — barely beating inflation. Always look at both the absolute and the annualised.

The Formulas

ROI % = (Final Value − Investment − Costs) / Investment × 100
Annualised ROI (CAGR) = ((Final Value − Costs) / Investment)1/years − 1
Multiple of Money = (Final Value − Costs) / Investment

Worked Example

Example: Marketing campaign: spent $10,000, generated $15,000 in attributable revenue over 3 years, with $0 maintenance. ROI = 50%. Annualised CAGR = 14.5%. Multiple of Money = 1.5×. A real-world good marketing investment would clear 100%+ ROI within 12–24 months — this is mediocre.
Example: Real estate flip: bought for $200,000, renovated for $30,000, sold for $300,000 after 18 months. ROI = (300 − 200 − 30) / 200 = 35%. CAGR ≈ 22% (1.5-year compounding). Strong.

Common ROI Mistakes

  • Ignoring time. 30% ROI is impressive in 1 year, weak over 10.
  • Ignoring opportunity cost. If your benchmark (S&P 500) returned 12% CAGR over the same period, an 8% CAGR project actually underperformed.
  • Not including all costs. Maintenance, taxes, your own time at a fair hourly rate.
  • Cherry-picking start/end dates. Always benchmark against random rolling periods.
  • Confusing gross with net ROI. Subtract every cost — including the unsexy ones.

Frequently Asked Questions

ROI vs IRR — what’s the difference?▾
ROI is a single in/out percentage. IRR (Internal Rate of Return) handles multiple cash flows over time and is mathematically equivalent to a discount rate that makes NPV = 0. Use ROI for simple single-period analysis; IRR for multi-year projects with intermediate cash flows.
What’s a ‘good’ ROI?▾
Depends on risk. Risk-free Treasury bonds: 4–5%. Stock market average: 8–12% CAGR. Active business investments should clear 15–25%+ to compensate for the risk. Below that, the public market is a better destination for your capital.
Should I include my own time as a cost?▾
Absolutely yes — at the rate you could earn elsewhere. Many “profitable” small businesses are unprofitable once the founder’s 80-hour weeks are valued at market rates.
How do I handle ongoing returns vs one-time exit?▾
If returns are recurring (e.g., dividends, rent), use the IRR or XIRR calculator. ROI is best for single-investment, single-exit situations.

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