ROI Calculator Calculate return on investment (ROI) with optional annualized ROI for time-based comparison.

Simple ROI = (Return − Investment) / Investment × 100. This metric is straightforward but has a limitation: it ignores the time dimension. Annualized ROI adjusts for this using the CAGR (Compound Annual Growth Rate) formula: Annualized ROI = (Final/Initial)^(1/years) − 1. This represents the constant annual return that would produce the same total return over the given period. For example, doubling your money in 5 years gives a simple ROI of 100% but an annualized ROI of about 14.87% per year. The annualized figure is what you should compare against other investments and benchmark returns. Note that ROI doesn't account for risk, opportunity cost, or cash flow timing — more sophisticated metrics like IRR (Internal Rate of Return) or NPV (Net Present Value) address these limitations.