ROI Calculator
Use this free ROI calculator to instantly measure the return on any investment. Enter your initial cost and final return value to see your ROI percentage, net profit, and how your investment compares to common benchmarks — whether you’re evaluating stocks, property, a business decision, or a marketing campaign.
ROI Calculator
How to Use the ROI Calculator
- Enter your initial investment amount (what you put in)
- Enter the final value or return (what you got back)
- Optionally enter the time period to calculate annualised ROI
- Click Calculate to see your ROI %, net profit, and annualised return
What Is ROI?
ROI (Return on Investment) is one of the most widely used metrics in finance and business. It tells you how much you gained — or lost — relative to what you originally invested, expressed as a percentage. A positive ROI means profitable; a negative ROI means a loss. What makes ROI so useful is that it works across every type of investment, from stocks and property to business spending and marketing campaigns — making it easy to compare very different investments on a level playing field.
ROI Formula
ROI (%) = ((Final Value − Initial Cost) ÷ Initial Cost) × 100
Example: You invest £5,000 and sell for £6,750 → ROI = ((6,750 − 5,000) ÷ 5,000) × 100 = 35% ROI
ROI Examples Across Investment Types
| Investment Type | Initial Cost | Final Value | Net Profit | ROI | Time Period |
|---|---|---|---|---|---|
| UK Stocks (ISA) | £10,000 | £13,500 | £3,500 | 35% | 3 years |
| Buy-to-let property | £50,000 deposit | £72,000 equity + rent | £22,000+ | 44%+ | 5 years |
| Marketing campaign | £2,000 | £7,500 revenue | £5,500 | 275% | 3 months |
| Business equipment | £8,000 | £6,400 | −£1,600 | −20% | 2 years |
| Savings account (4.5%) | £20,000 | £22,086 | £2,086 | 10.4% | 2 years |
| Online course/skill | £500 | £8,000 salary uplift | £7,500 | 1,500% | 1 year |
Annualised ROI — Why Time Matters
Basic ROI doesn’t account for how long your money was tied up. A 50% ROI over 10 years is far less impressive than a 50% ROI over 6 months. Annualised ROI (also called CAGR — Compound Annual Growth Rate) adjusts for this, letting you compare investments held for different time periods on a fair basis.
Annualised ROI Formula: ((Final Value ÷ Initial Cost) ^ (1 ÷ Years)) − 1
| Total ROI | Time Period | Annualised ROI | Verdict |
|---|---|---|---|
| 50% | 10 years | 4.1%/year | Below average |
| 50% | 5 years | 8.4%/year | Solid |
| 50% | 2 years | 22.5%/year | Excellent |
| 50% | 6 months | ~125%/year | Outstanding (or high risk) |
What Is a Good ROI?
There’s no universal “good” ROI — it depends entirely on the asset class and the risk involved. Higher-risk investments should deliver higher ROI to justify that risk. Here are typical benchmarks used in the UK market:
- Cash savings (low risk): 4–5% per year (2025 UK rates)
- UK bonds/gilts (low-medium risk): 4–5% per year
- Stock market index funds (medium risk): 7–10% per year historically
- Buy-to-let property (medium risk): 5–12% per year including capital growth
- Business investment (higher risk): 15–30%+ to justify the risk
- Marketing spend (variable): 200–500% is considered strong for paid advertising
If your ROI is consistently below what a savings account pays (currently ~4–5% in the UK), it may be worth reconsidering the investment. Compare your options using our Savings Calculator and Compound Interest Calculator to see what your money could earn at different rates.
ROI vs Other Investment Metrics
| Metric | What It Measures | Best Used For |
|---|---|---|
| ROI | Total % return on cost | Any investment, quick comparison |
| CAGR | Annualised % return | Comparing different time periods |
| IRR | Time-weighted cash flow return | Complex multi-year projects |
| Payback Period | Time to recoup investment | Business decisions, equipment |
| Net Present Value | Future cash flows in today’s money | Long-term financial modelling |
ROI Calculator FAQ
What is the difference between ROI and profit?
Profit is the absolute monetary gain — for example, £1,500. ROI expresses that gain as a percentage of the investment — for example, 30%. ROI is more useful when comparing investments of different sizes, because £1,500 profit on a £5,000 investment (30% ROI) is very different from £1,500 profit on a £50,000 investment (3% ROI).
Can ROI be negative?
Yes — a negative ROI means your investment lost value. For example, if you invested £10,000 and received £8,000 back, your ROI is −20%. This is important for tax purposes as capital losses can sometimes offset capital gains.
Does ROI account for inflation?
Standard ROI does not adjust for inflation. A 5% ROI in a year where inflation was 6% actually represents a −1% real return — your purchasing power declined despite the positive nominal ROI. For real-value comparisons, subtract the inflation rate from your ROI to get the real return.
How do I calculate ROI on a rental property?
For property, ROI should include both rental income and capital appreciation. Add your total annual rent received to the increase in property value, then divide by your total investment (deposit + purchase costs). This gives a more complete picture of property ROI than capital growth alone.
Is 10% ROI per year realistic?
Yes — the long-term average annual return of global stock market index funds is approximately 7–10% per year before inflation. However, individual years can vary dramatically — from +30% to −40% — so short-term results are unpredictable even if long-term averages are consistent.
Related Calculators
- Compound Interest Calculator — See how ROI compounds over multiple years
- Savings Calculator — Compare your ROI against a savings account return
- Mortgage Calculator — Evaluate ROI on property investments
- Percentage Increase Calculator — Calculate growth percentage between two values
- Loan Calculator — Factor borrowing costs into your ROI analysis