ROI
Measure the return on any investment as a percentage of what it cost you, along with the raw dollar profit. Enter the final value and the cost to compare deals on equal footing.
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💡 Good to know: ROI ignores time: a 50% return is superb in a year and mediocre over a decade. Use CAGR to compare across periods.
Worked example
ROI: 50% · Profit: $500.00
How it’s solved
Worked on the example above, step by step — follow along and you can do it on paper next time, no tool required.
- ROI expresses profit as a percent of what you put in.
- Profit = final value − cost
$1,500.00 − $1,000.00 = $500.00 - Divide by the cost and multiply by 100
$500.00 ÷ $1,000.00 × 100 = 50%
Learn the method
Inputs
- Final value $
1500 - Cost $
1000
Frequently asked
How is ROI calculated?
ROI = (final value − cost) ÷ cost × 100. A $1,500 return on a $1,000 cost is a 50% ROI.
Does ROI account for time?
No — it's a total return. For an annualized figure, use the CAGR tool instead.