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    ROI Calculator

    Calculate Return on Investment (ROI) and annualised CAGR. Compare investment performance instantly.

    Free to use. Runs in your browser.

    ROI = ((Final Value − Initial Cost) ÷ Initial Cost) × 100. A 50% ROI means you earned half your investment back as profit. For investments held over multiple years, annualised ROI (CAGR) is more useful: a 60% total return over 5 years = 9.9% CAGR; over 2 years = 26.5% CAGR. The S&P 500 has averaged ~10% annually since 1926.

    Enter invested and returned amounts in any currency, with optional years for CAGR.

    ROI Calculator

    ROI Explained in Plain English

    Return on Investment measures how much you gained (or lost) relative to what you put in. If you invested £10,000 and got back £13,000, your ROI is 30%. Simple as that.

    The formula: ROI = ((Final Value - Initial Cost) / Initial Cost) x 100. But raw ROI has a blind spot, it ignores time. A 30% return in 1 year is excellent. A 30% return over 10 years is mediocre. That's why CAGR (Compound Annual Growth Rate) exists.

    CAGR smooths your return into an equivalent annual rate, letting you compare investments of different durations on equal terms. A 30% total return over 3 years is roughly 9.1% CAGR. Over 10 years, it's only 2.7% CAGR.

    Investment Return Benchmarks

    Investment TypeTypical Annual ReturnRisk LevelNotes
    Cash savings (UK)4 to 5%Very lowFSCS protected up to £85,000
    UK government bonds3 to 5%LowGilts; rate varies with base rate
    FTSE 100 (UK stocks)7 to 10%Medium-highLong-run average including dividends
    S&P 500 (US stocks)8 to 12%Medium-high~10% average since 1926
    UK property5 to 8%MediumCapital growth + rental yield combined
    Global index fund7 to 10%MediumDiversified; lower volatility than single market

    What this means for you: These are long-run averages. Individual years vary wildly, the S&P 500 has had years of +30% and years of -37%. Past returns don't guarantee future performance. But they give you a benchmark: if someone promises consistent 20%+ annual returns with "low risk," be very sceptical.

    The Power of Compounding

    £10,000 Invested atAfter 5 YearsAfter 10 YearsAfter 20 Years
    3% per year£11,593£13,439£18,061
    5% per year£12,763£16,289£26,533
    8% per year£14,693£21,589£46,610
    10% per year£16,105£25,937£67,275

    What this means for you: Time is the most powerful variable in investing. At 8% annual return, your money doubles roughly every 9 years (the Rule of 72: divide 72 by the annual return to estimate doubling time). Starting 5 years earlier matters more than picking a slightly better fund.

    Common ROI Mistakes

    Ignoring Inflation

    A 5% return when inflation is 4% gives you only 1% real growth. Always think in real (inflation-adjusted) terms. Nominal returns look better but don't reflect actual purchasing power.

    Forgetting Fees and Tax

    A fund returning 8% with 1.5% annual fees actually gives you 6.5%. Over 20 years, that 1.5% fee eats roughly a third of your total gains. ISA wrappers shelter returns from UK capital gains tax.

    Cherry-Picking Timeframes

    You can make almost any investment look good or bad by choosing the right start and end dates. Always look at returns over multiple full market cycles (10+ years) for a fair picture.

    Confusing ROI with Profit

    A 200% ROI sounds incredible, but if you only invested £50, that's £100 profit. The percentage matters less than the absolute amount and the time it took. Context is everything.

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    How to use this tool

    1

    Enter the amount invested

    2

    Enter the amount returned

    3

    Optionally enter the investment period in years

    Common uses

    • Comparing returns across different investments
    • Calculating annualised returns for long-term holdings
    • Evaluating property investment performance
    • Assessing business investment decisions
    • Benchmarking portfolio returns against market averages

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    Frequently Asked Questions

    What is ROI?
    Return on Investment measures the gain or loss relative to the initial cost. ROI = ((Final Value - Initial Cost) / Initial Cost) x 100. A 50% ROI means you earned half your investment back as profit. It's the simplest measure of investment performance.
    What is annualised ROI (CAGR)?
    CAGR (Compound Annual Growth Rate) adjusts total ROI for the time period, letting you compare investments held for different durations. A 50% total return over 5 years is 8.4% CAGR. Over 2 years, it's 22.5% CAGR, a much better investment.
    What's a good ROI?
    It depends on the investment type and risk. Cash savings: 4-5%. Bonds: 3-5%. Stock market index: 7-12% long-run average. Property: 5-8% including rental yield. If someone promises consistent 20%+ with low risk, be very sceptical.
    How is ROI different from profit?
    Profit is the absolute amount gained (£5,000). ROI is the percentage return relative to what you invested (50% if you invested £10,000). ROI matters because £5,000 profit on a £10,000 investment is great, but £5,000 on £500,000 is poor.
    Does ROI account for inflation?
    Not automatically. A 5% ROI when inflation is 4% gives you only 1% real return. For real (inflation-adjusted) ROI, subtract the inflation rate from your nominal ROI. Our Inflation Calculator can help with this.
    What about fees and taxes?
    This calculator shows gross returns. In practice, management fees (0.1-1.5% annually), trading costs, and capital gains tax (10-20% in the UK, sheltered in ISAs) all reduce your actual return. A 10% gross return might be 7-8% net.
    How do I calculate ROI on property?
    Include ALL costs: purchase price, stamp duty, solicitor fees, renovation, mortgage interest, and maintenance. For returns, include both capital appreciation and rental income. Many property investors forget stamp duty and maintenance, overstating their ROI by 2-3%.
    What is the Rule of 72?
    Divide 72 by your annual return rate to estimate how many years it takes to double your money. At 8% annual return: 72 / 8 = 9 years to double. At 12%: 6 years. It's a handy mental shortcut for compound growth.
    Can ROI be negative?
    Yes, a negative ROI means you lost money. If you invested £10,000 and got back £8,000, your ROI is -20%. Negative ROI is common in individual years for stock investments, which is why long holding periods (10+ years) are recommended.
    How do I compare two investments with different time periods?
    Use CAGR (annualised ROI). Investment A returning 60% over 5 years has 9.9% CAGR. Investment B returning 30% over 2 years has 14.0% CAGR. Despite the lower total return, B performed better annually. Enter the time period in the calculator above.
    What's the S&P 500 historical average return?
    The S&P 500 has averaged roughly 10% annual return since 1926 (about 7% after inflation). But individual years range from +37% to -37%. The average masks enormous volatility, which is why time in the market matters more than timing the market.
    Is this financial advice?
    No. This is an educational calculator for illustrative purposes. Investment returns are not guaranteed. Past performance doesn't predict future results. Always consult a qualified financial adviser before making investment decisions.

    Results are for general informational purposes only and should be checked before use. They are not professional advice. See our Disclaimer and Terms of Service.