ROI Calculator – Measure What an Investment Really Returned
Return on investment (ROI) answers one question: relative to the money you put in, how much did you actually make? It works for almost anything you buy and later sell or hold, such as a stock position, a rental flat, a piece of equipment or a side project. This ROI calculator itemises every cost and every return, so fees, dividends, rent and tax are counted instead of guessed.
The ROI formula
Every amount goes into one of two buckets: money in or money out.
Money in = purchase price + buying costs + holding costs
Money out = sale value − selling costs + income received
Net profit = money out − money in − tax
ROI = net profit ÷ money inTake a stock example. You buy 100 shares for 5,000 and pay 10 commission, so money in is 5,010. You collect 180 in dividends, then sell for 6,200 and pay another 10 commission, so money out is 6,370. Net profit is 1,360 and ROI is 1,360 ÷ 5,010 = 27.15%. The calculator also shows the break-even sale value (4,840, or 48.40 per share), which is the lowest price at which you would not lose money.
Why holding costs change the answer
Two ROI calculators can give different numbers for the same deal because they put holding costs in different places. This tool counts maintenance, insurance, fund fees and property tax as money you put in, which enlarges the denominator. Some calculators subtract them from income instead, which leaves a smaller denominator and a higher-looking ROI. Neither is wrong, but you should only compare ROI figures that use the same convention.
Fees, income and tax
- Buying and selling costs can be flat amounts or a percentage of the price, which suits brokerage commissions and estate-agent fees alike.
- Income such as dividends, rent or interest is entered as a gross total. The costs of earning it go into holding costs.
- Tax is optional: one flat rate applied to a positive profit, with nothing on a loss. Real tax codes often treat income and capital gains differently, so read the after-tax ROI as an estimate.
With a 15% tax rate, the stock example keeps 1,156 of its 1,360 profit and ROI falls to 23.07%. Enter a target ROI and the calculator solves for the sale value you would need, grossing the profit up for tax: a 30% after-tax ROI needs a sale at 6,608.24.
Why annualising matters
Plain ROI ignores time. A 50% gain sounds better than a 30% gain, but not if the first took five years and the second took two. Annualised ROI converts a total ROI into a yearly compound rate:
Annualised ROI = (1 + ROI)^(1 ÷ years) − 1| Investment | Total ROI | Years | Annualised |
|---|---|---|---|
| A: 10,000 → 15,000 | 50.00% | 5 | 8.45% |
| B: 10,000 → 13,000 | 30.00% | 2 | 14.02% |
Investment B earned less in total but nearly twice as much per year. The Compare tab ranks up to four investments this way and flags when the biggest total ROI is not the best yearly rate.
When to use XIRR instead
ROI assumes all the money went in on day one and all of it came out on the last day. That is fine for a single purchase and sale. If you invested in instalments, withdrew part-way through or received income at irregular dates, the timing of each cash flow matters, and a money-weighted rate such as XIRR is more accurate. The same annualising formula also gives CAGR, which measures growth between two values without any costs or income.
What this calculator leaves out
It does not model leverage, so cash-on-cash return on a mortgaged property needs a separate calculation based on your deposit rather than the full price. It also does not compute time-weighted returns, which fund managers use to strip out the effect of deposits and withdrawals.