How to use it
- Type the Cost of the investment: what you paid.
- Type the Total you got back: the sale price plus any income from it.
- Type the Years you held it to see the yearly return, or leave it empty for the ROI only.
- Read the Return on investment, the Profit and the Yearly return, then the steps.
How the return is calculated
Return on investment is the gain from the investment minus its cost, divided by its cost. It answers how much you earned for each unit you put in, but it does not say how long that took.
The yearly return is the constant yearly rate that takes the cost to the total you got back in the years you held it. It is the compound annual growth rate of the investment, so the same ROI over a longer time gives a smaller yearly return.
ROI = (gain − cost) ÷ cost
Yearly return = (gain ÷ cost)^(1 ÷ years) − 1
gain the total you got back
cost what you paid
years the time you held the investment- A cost of 10,000 that returns 13,000 after 3 years has a ROI of 30% and a yearly return of 1.30^(1/3) − 1 = 9.14%.
- A ROI of 0% means you got back exactly what you paid; a yearly return of 0% means the same.
Why the ROI and the yearly return differ
A 30% ROI earned over one year is a 30% yearly return. Earned over three years, the same 30% is only about 9% a year, because the money was working for longer. Compare investments with the yearly return when they were held for different times.
What this calculator does not include
- Taxes on the gain, such as the tax on the sale of shares or property.
- Fees, commissions and the cost of the account, unless you add them to the cost yourself.
- Inflation: a return that is the same in money terms can be worth less in purchasing power. The Salary raise calculator shows the same idea for pay.
- Money that came in or went out at different times. Use the NPV and IRR calculator for cash flows spread over the years.
Worked example: cost 10,000, got back 13,000 after 3 years
The profit is 13,000 − 10,000 = 3,000, so the ROI is 3,000 ÷ 10,000 = 30.00%.
The yearly return is 1.30^(1/3) − 1 = 9.14%. Over the three years the money grew by about 9.14% a year, which is less than 30% a year would be.
| Figure | |
|---|---|
| Profit | 3,000.00 |
| Return on investment | 30.00% |
| Yearly return over 3 years | 9.14% |
Frequently asked questions
Is the gain the profit or the total I got back?
Enter the total you got back, for example the sale price plus income. The calculator subtracts your cost to find the profit, so entering the profit would give a wrong ROI.
What is a good ROI?
It depends on the risk, the time and what you could have earned elsewhere. The calculator gives the figure; it does not say whether a return is good for you.
Why is the yearly return lower than the ROI?
The ROI does not count time. When the same gain is spread over several years, each year earns a smaller share of the growth, so the yearly return is lower.
Can I use it for property or shares?
Yes, if you enter the total received, including any rent or dividends, and the total paid, including purchase costs. Taxes and fees are not included unless you add them.
Is my data sent to a server?
No. The calculation runs in your browser, and nothing you enter is sent to us.
Sources
- Wikipedia: Return on investment (gain minus cost over cost)
- Wikipedia: Compound annual growth rate (yearly rate over several years)
Figures and text last checked on Tuesday, November 10, 2026.