It depends on risk and time. Beating inflation (~3%) is the floor for long-term money; broad stock markets have annualized roughly 7–10%. A good ROI must be judged against what a safer alternative would have returned over the same period.

Yes — any time you more than double your money, ROI is above 100%. There is no upper limit, which is exactly why time and risk context matter.

Why is my annualized return different from ROI ÷ years?

Because returns compound. Dividing ROI by years is an arithmetic shortcut that overstates the yearly rate whenever the total return is large.

ROI Calculator — Return on Investment, Annualized

What ROI measures

Return on investment (ROI) is the simplest scoreboard in finance: how much you gained compared with what you put in, as a percentage. It is used for everything from stock picks to marketing campaigns to a rental property, because it needs nothing but two numbers. Its weakness is just as simple: ROI has no sense of time. The calculator therefore reports the annualized return alongside it — the per-year rate that would produce the same result — so a 3-year investment and a 10-year investment can be compared honestly.

The ROI formula

ROI = (Amount returned − Amount invested) ÷ Amount invested × 100

And the annualized return is (Returned ÷ Invested)^{1 ÷ years} − 1 — the same geometric idea as CAGR. In fact, for a single lump-sum investment, annualized return and CAGR are the same number wearing two names.

Using ROI well

Include all returns: dividends, rent, interest and the final sale price all belong in "amount returned."
Include all costs: fees, commissions and closing costs belong in "amount invested" (or subtracted from returns).
Always pair ROI with time: quote both, or use the annualized figure, before calling one investment better than another.
Remember risk and taxes: ROI says nothing about how bumpy the ride was, and pre-tax ROI overstates what you keep.

ROI, annualized return and CAGR: which should you quote?

Plain ROI ignores time completely, and that is its biggest trap. A 50% ROI earned over 3 years is an excellent 14.47% per year; the same 50% stretched over 10 years is a mediocre 4.14% per year — barely ahead of inflation. The two results above are shown together precisely so this trick of the light is visible: the total for bragging, the annualized figure for comparing.

Use ROI for one-off, short projects (a flip, a campaign, a single purchase). Use the annualized return whenever you compare investments held for different lengths of time. When an investment also has money added or withdrawn along the way, neither number is the whole story — that situation calls for the CAGR Calculator for end-to-end growth, or an IRR-style analysis for irregular cash flows.

Worked example

You invest $10,000 and get back $15,000 after 3 years. Profit is $5,000 and ROI = $5,000 ÷ $10,000 = 50%. Annualized, that's (1.5)^1/3 − 1 = 14.47% per year — the figure to compare against a savings account's APY or the stock market's long-run CAGR.

How to use this calculator

Enter everything you put in — purchase price plus fees and costs.
Enter everything you got back — final value plus any income received along the way.
Enter how many years the investment ran.
Read the ROI for the headline, and the annualized return for any fair comparison.

ROI in business decisions

Businesses use the same formula for equipment, ads and projects: (gain − cost) ÷ cost. The discipline is identical — count all the costs (including staff time) and be honest about which gains the investment actually caused. For pricing decisions rather than investments, see the Margin Calculator and Break-Even Calculator.

ROI Calculator