Question 1

How do I calculate return on investment?

Accepted Answer

ROI = (final value − amount invested) ÷ amount invested × 100. If you invest $10,000 and it grows to $13,500, your ROI is 35%.

Question 2

What is annualized return?

Accepted Answer

Annualized return spreads the total gain evenly across the years held: (final ÷ invested)^(1/years) − 1. It lets you compare investments of different lengths on equal footing.

Question 3

Is a higher ROI always better?

Accepted Answer

Not on its own — a high ROI over many years can be worse than a modest one over a short period. Check the annualized return and consider the risk taken to earn it.

Question 4

Does ROI account for fees and taxes?

Accepted Answer

This basic calculation doesn't. For a true picture, use the net amount after fees and taxes as your final value so the ROI reflects what you actually keep.

ROI Calculator

Balance over time

Track it for real in Lumi

Frequently Asked Questions

More calculators