ROI (Return on Investment) is a measure of how much profit or loss an investment generates relative to its cost. It is expressed as a percentage. ROI = (Net profit / Cost of investment) x 100. For example, if you invest 1,000 and receive back 1,300, your net profit is 300 and your ROI is 30%. ROI is used to compare the efficiency of different investments regardless of their size.

What counts as a good ROI depends on the investment type, time horizon and risk level. For stock market investments, a 7-10% annualised CAGR (matching the historical average of the S&P 500) is considered a benchmark. For real estate, 8-12% annualised ROI including rental income and appreciation is typical in many markets. For business investments and marketing campaigns, ROI requirements vary widely - a marketing campaign ROI of 5:1 (400% ROI) is often cited as a minimum for profitability. Higher-risk investments should deliver higher ROI to justify the risk.

ROI Calculator - LazyTools

Q: What is the difference between ROI and CAGR?

ROI (Return on Investment) measures total return over the entire investment period without accounting for time. CAGR (Compound Annual Growth Rate) is the annualised equivalent of that return, assuming compounding. Two investments with the same total ROI but different holding periods have very different CAGRs. For example, a 50% total ROI over 2 years is a 22.5% CAGR, while the same 50% ROI over 5 years is only a 8.5% CAGR. CAGR enables fair comparison between investments held for different durations.

Q: How do you calculate ROI?

ROI formula: ROI = ((Final value - Initial investment) / Initial investment) x 100. Or equivalently: ROI = (Net profit / Cost) x 100. For example: Initial investment 5,000. Final value 7,500. Net profit = 7,500 - 5,000 = 2,500. ROI = (2,500 / 5,000) x 100 = 50%. If you also know the holding period in years, you can calculate CAGR: CAGR = (Final value / Initial investment) to the power of (1 / years) minus 1, expressed as a percentage.

Q: How do you calculate CAGR?

CAGR formula: CAGR = ((Final value / Initial investment) to the power of (1 / years)) - 1, expressed as a percentage. Example: Initial investment 10,000. Final value 16,105 after 5 years. CAGR = (16,105 / 10,000) to the power of (1/5) - 1 = 1.6105 to the power of 0.2 - 1 = 1.1 - 1 = 10% per year. This means the investment grew at an equivalent rate of 10% per year, compounded annually.

Q: What is payback period?

Payback period is the length of time it takes for an investment to generate returns equal to the initial cost, breaking even. It is calculated as Initial investment divided by annual net profit (or cash flow). A shorter payback period means the investment recovers its cost faster, reducing risk. Payback period is commonly used in business investment decisions alongside ROI and CAGR.

Q: How do I compare multiple investments?

To fairly compare investments, use CAGR rather than simple ROI, because investments held for different periods are not directly comparable on total return alone. This ROI calculator includes a comparison mode where you can add up to 4 investments with different initial amounts, final values and holding periods. The tool calculates ROI and CAGR for each and ranks them, making it straightforward to identify which investment performed best on an annualised basis.

Q: How do I calculate marketing campaign ROI?

Marketing ROI = ((Revenue generated - Marketing cost) / Marketing cost) x 100. For example, if a campaign cost 10,000 and generated 45,000 in revenue, the marketing ROI is (35,000 / 10,000) x 100 = 350%. A common benchmark is a 5:1 ratio (400% ROI) for marketing campaigns. Use the initial investment field for campaign cost and final value for revenue generated. For campaigns running over multiple months, also enter the duration to get the annualised CAGR.

Key features

Everything the ROI Calculator Does

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Simple ROI %

Calculates the total return on investment as a percentage: (Final value minus initial investment) divided by initial investment, times 100.

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CAGR (Annualised ROI)

Calculates compound annual growth rate so you can compare investments held for different durations on a level playing field. The key differentiator absent on most free tools.

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Total Gain or Loss

Shows the absolute gain or loss in your chosen currency alongside the percentage return, for an instant sense of monetary outcome.

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Payback Period

Calculates how long the investment takes to return its initial cost, based on the annualised gain rate. Shown in years and months.

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Compare 4 Investments

Compare mode lets you add up to 4 investments with different amounts, final values and durations. Each is ranked by CAGR for a fair comparison.

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Timeline Growth Chart

A canvas chart plots the investment value year by year from start to end, using the calculated CAGR to show the compound growth curve.

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7 Currency Symbols

Supports USD, GBP, EUR, INR, AED, AUD and CAD. Currency symbol applies throughout all monetary displays in both single and compare modes.

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Labelled Investments

Name each investment (e.g. S&P 500, Property, Savings account) for clear identification in the comparison chart and results.

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100% Private

No data is sent to any server. No account or login required. All calculations run locally in your browser.

How to use

How to Use the ROI Calculator

Enter your initial investment

Type the total amount you originally invested or spent. For stocks this is your purchase cost including fees. For marketing this is your campaign budget. For real estate this is your purchase price plus buying costs.

Enter the final value

Enter the current or final value of the investment. For stocks this is the current market value. For marketing this is the total revenue generated. For real estate this is the current market value or sale price.

Enter the holding period in years

Enter how many years you have held the investment. Use decimals for partial years (e.g. 2.5 for two and a half years). This is required to calculate CAGR. For marketing campaigns, use the campaign duration in years (e.g. 0.25 for a 3-month campaign).

Click Calculate ROI and CAGR

Click the button to see your simple ROI percentage, annualised CAGR, total gain or loss in currency, and payback period. The chart shows your investment growing year by year over the holding period.

Switch to Compare mode for multiple investments

Click the Compare Investments button in the toolbar. Add each investment with its own amount, final value and duration. Each investment is automatically ranked by CAGR. The comparison chart plots all investments together.

Interpret the CAGR comparison

The investment with the highest CAGR delivered the best annualised return regardless of how much was invested or how long it was held. Use CAGR rather than simple ROI to compare investments with different holding periods fairly.

Competitor comparison

ROI Calculator: LazyTools vs Competitors

Most free ROI calculators return a single percentage with no CAGR, no comparison mode and no chart. LazyTools provides the full analysis that investors and business owners actually need.

Feature	LazyTools	calculatorsoup.com	investor.gov	Omnicalculator
Simple ROI %	Yes	Yes	Yes	Yes
CAGR (annualised ROI)	Yes	No	Yes	Yes
Total gain in currency	Yes	Yes	Yes	Yes
Payback period	Yes	No	No	Yes
Compare multiple investments	Yes (up to 4)	No	No	No
Timeline growth chart	Yes	No	No	Yes
Multiple currencies	Yes (7)	No	USD only	Yes
No login required	Yes	Yes	Yes	Yes

Formulas & reference

ROI and CAGR Formulas Explained

ROI and CAGR are the two most important return metrics for evaluating any investment. Understanding the difference and knowing when to use each is the key to making fair comparisons between different opportunities.

Metric	Formula	When to use it
Simple ROI	(Final value - Initial) / Initial x 100	Single period, same duration investments, quick comparison
Net profit	Final value - Initial investment	Absolute gain or loss in currency terms
CAGR	(Final / Initial) to the power of (1/years) - 1	Comparing investments held for different durations
Payback period	Initial investment / Annual gain	How long to recover the original investment
ROI multiple	Final value / Initial investment	Venture capital and private equity (e.g. 3x, 5x)
Marketing ROI	(Revenue - Cost) / Cost x 100	Campaign performance relative to spend

-- Example: Stock investment Initial investment: $10,000 Final value: $14,693 (after 5 years) Holding period: 5 years Simple ROI: (14,693 - 10,000) / 10,000 x 100 = 46.9% Net profit: 14,693 - 10,000 = $4,693 CAGR: (14,693 / 10,000) ^ (1/5) - 1 = 8.0% per year Payback: 10,000 / (4,693 / 5) = 10.7 years

ROI vs CAGR: which to use?

Use simple ROI when comparing investments held for exactly the same duration. Use CAGR whenever investments have different holding periods. For example, Investment A returned 80% total ROI over 4 years, and Investment B returned 50% total ROI over 2 years. Simple ROI incorrectly suggests A was better. CAGR reveals A returned 15.8% per year while B returned 22.5% per year - B was the stronger performer on an annualised basis. This distinction is what most free ROI calculators fail to surface, and is why CAGR is the professional standard for comparing investments.

Stock investment return calculator

For stock investment return calculations, enter your total purchase cost including brokerage fees as the initial investment. Enter the current portfolio value or sale proceeds minus selling fees as the final value. Enter the number of years you have held the position. The CAGR result tells you your annualised return, which you can benchmark against the S&P 500 historical average of approximately 7-10% per year (inflation-adjusted). Use Compare mode to evaluate individual stock picks against each other or against an index fund.

Real estate ROI calculator

For real estate ROI calculations, the initial investment should include purchase price, stamp duty, legal fees and any renovation costs. The final value is the current market value or sale proceeds. For rental properties, you can add total rental income received to the final value to capture the full return including yield. The CAGR then reflects the total annualised return combining capital appreciation and rental income. A 8-12% CAGR including rental yield is typical in many markets, though this varies significantly by location.

Marketing campaign ROI calculator

For marketing campaign ROI calculations, enter the total campaign cost as the initial investment and the total revenue attributed to the campaign as the final value. Marketing ROI = (Revenue - Cost) / Cost x 100. A commonly cited benchmark is a 5:1 ratio (400% ROI) as the minimum for a profitable campaign, though this varies by industry and margin. For campaigns running less than a year, enter the duration as a decimal (e.g. 0.25 for a 3-month campaign) to get the annualised CAGR, which lets you compare campaign performance against longer-horizon investments.

FAQ

Frequently Asked Questions

What is ROI?▼

ROI (Return on Investment) measures profit or loss relative to cost, as a percentage. ROI = (Net profit / Cost) x 100. If you invest 1,000 and receive back 1,300, ROI is 30%. ROI compares investment efficiency regardless of size.

What is the difference between ROI and CAGR?▼

ROI is total return over the whole period with no time adjustment. CAGR (Compound Annual Growth Rate) is the annualised equivalent, enabling fair comparison between investments of different durations. A 50% ROI over 2 years is 22.5% CAGR. The same 50% ROI over 5 years is only 8.5% CAGR. Always use CAGR to compare investments held for different lengths of time.

How do you calculate ROI?▼

ROI = ((Final value - Initial investment) / Initial investment) x 100. Example: Invested 5,000, now worth 7,500. Net profit = 2,500. ROI = (2,500 / 5,000) x 100 = 50%. Enter these figures above and click Calculate to also get CAGR, total gain and payback period.

How do you calculate CAGR?▼

CAGR = ((Final value / Initial investment) to the power of (1 / years)) - 1, as a percentage. Example: 10,000 grows to 16,105 over 5 years. CAGR = (16,105/10,000)^(1/5) - 1 = 1.6105^0.2 - 1 = 10% per year.

What is a good ROI?▼

It depends on investment type and risk. Stock market benchmark: 7-10% annualised CAGR (historical S&P 500 average). Real estate: 8-12% annualised including rental yield. Marketing campaigns: 5:1 ratio (400% ROI) is often cited as a minimum. Higher-risk investments should deliver higher ROI to justify the risk taken.

What is payback period?▼

Payback period is how long it takes for an investment to return its initial cost. Calculated as initial investment divided by annual net gain. A shorter payback means faster cost recovery and less risk. Used alongside ROI and CAGR for a complete investment picture.

How do I compare multiple investments?▼

Use CAGR (not simple ROI) to compare investments held for different durations. Click Compare Investments in the toolbar and add up to 4 investments. The tool ranks each by CAGR and plots a comparison chart, making the best performer immediately clear.

How do I calculate marketing campaign ROI?▼

Marketing ROI = (Revenue generated - Campaign cost) / Campaign cost x 100. Enter campaign cost as initial investment and revenue generated as final value. A 5:1 ratio (400% ROI) is a common benchmark. Enter campaign duration to get the annualised CAGR for comparison with longer-horizon investments.

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