Easily calculate your return on investment with the ROI Calculator at bestcdcalculator.com—fast, accurate, and perfect for smarter money moves.
Return on Investment (ROI) Calculator
Calculate the profitability of your investments
Return on Investment
Investment Gain/Loss
Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment. It compares the magnitude and timing of gains from investment directly to the investment costs.
ROI is expressed as a percentage and is commonly used in business decisions to compare the efficiency of different investments. A higher ROI indicates a more profitable investment.
Investment Comparison
Compare your investment’s performance against common benchmarks:
- S&P 500 Historical Average: ~10% annually
- Real Estate: ~3-5% annually
- Corporate Bonds: ~3-5% annually
- Savings Accounts: ~0.5-1% annually
Understanding Return on Investment
Return on Investment (ROI)
A financial metric that measures the profitability of an investment. It’s calculated as the ratio of net profit to the initial investment cost, expressed as a percentage.
Annualized ROI
The average yearly return on investment over a specific period. It allows for comparison between investments with different time horizons by standardizing returns to an annual basis.
Simple vs. Annualized ROI
Simple ROI measures total return without considering time. Annualized ROI accounts for the investment period, providing a more accurate measure for comparing investments of different durations.
ROI Limitations
ROI doesn’t account for investment risk, inflation, or the time value of money. It’s best used alongside other metrics like NPV, IRR, and payback period for comprehensive investment analysis.
ROI in Decision Making
Businesses use ROI to evaluate the efficiency of different investments. It helps prioritize projects and allocate capital to the most profitable opportunities.
Interpreting ROI Values
Positive ROI indicates profit, negative ROI indicates loss. Generally, an ROI above 5-7% is considered good, but acceptable thresholds vary by industry, risk tolerance, and investment type.