Free Tool
ROI Calculator
The most used formula in business, done plainly: enter what something cost and what it gained, and this calculator gives you the ROI, the net gain, and the annualised ROI — with the period always stated, because an ROI without a period is meaningless.
Estimates and scenarios for planning purposes only — not financial advice. The results on this page are built from the numbers you enter. They are planning aids, not predictions, and not financial, tax or legal advice. Nothing you enter leaves your browser.
What this tool does
ROI is (gain − cost) ÷ cost × 100. If a course cost $1,000 and the work it led to paid $1,500, the ROI is (1,500 − 1,000) ÷ 1,000 × 100 = 50%. The net gain is the same subtraction without the division: $500. The annualised ROI converts the result to a yearly rate, so a 50% return over 6 months and a 50% return over 2 years can be compared: annualised ROI = (1 + ROI)^(12 ÷ months) − 1, expressed as a percentage. A 50% return over 12 months is 50% a year; the same 50% over 6 months is about 125% a year, because the money was only tied up for half the year.
The annualisation assumes the return compounds, which is a convention for comparison — not a claim that you could actually repeat the return every six months. That is why the period is stated next to the annualised figure, always.
Try it
Waiting. Enter cost, gain and period and press Calculate ROI.
How it works
ROI = (gain − cost) ÷ cost × 100. Net gain = gain − cost. Annualised ROI = ((1 + ROI as a decimal)^(12 ÷ months) − 1) × 100. The annualisation uses compound growth maths: it asks what yearly rate, compounded, would produce the same total return over the period you entered. Over 12 months the annualised figure equals the ROI itself; over 6 months it is higher, because the same return was earned in half the time.
Gain means the total return, not the profit: the amount that came back, including the original cost. If you spent $1,000 and got $1,500 back, the gain is $1,500 and the profit is $500. Entering the profit as the gain would understate the ROI.
Assumptions and limitations
- ROI does not model risk. Two investments with the same ROI are not equally good if one could lose everything and the other could not — the formula cannot see that, and it does not try to.
- ROI is a single-period measure over the period you enter. It does not say whether the return would repeat, and annualising it does not make it repeatable — the annualised figure is a comparison convention, not a forecast.
- The calculator compares one cost against one gain. It does not include running costs, time, tax or inflation unless you include them in the cost yourself.
Worked example
Example: cost $1,000, gain $1,500, period 12 months. Net gain = 1,500 − 1,000 = $500. ROI = 500 ÷ 1,000 × 100 = 50%. Annualised ROI over 12 months = 50% per year.
Frequently asked questions
What is the difference between ROI and profit?
Profit is the money: gain minus cost. ROI is the ratio: profit divided by cost, as a percentage. A $500 profit on a $1,000 cost is a 50% ROI; the same $500 on a $10,000 cost is a 5% ROI.
Why does ROI need a period?
Because 50% over six months is a much better result than 50% over five years, and a bare '50% ROI' cannot tell them apart. Every ROI you quote should carry its period — this calculator always shows both.
What does annualised ROI mean?
The yearly rate that would produce the same return over the period, if the return compounded. It exists so returns over different periods can be compared. It is a convention, not a prediction that the return will repeat.
Can ROI be negative?
Yes — whenever the gain is smaller than the cost. A gain of $800 on a $1,000 cost is a −20% ROI: a loss of $200, expressed as a rate.
How is this different from the affiliate ROI calculator?
The formula is the same. The affiliate version is specialised: its inputs are commission net of reversals and ad-plus-content spend, so it states exactly what counts on each side. This one takes any cost and any gain.