ROI Percentage Calculator

Net return divided by the amount invested, times 100. Turning 10,000 into 20,000 is a 100% ROI.

ROI ignores time entirely. Annualised return — the compound annual growth rate — expresses it as a per-year rate, which is the only way to compare investments of different lengths.

Because returns compound. It is 14.87% a year, since 1.1487 to the fifth power is 2. Dividing by years always overstates the rate, and the gap widens with both the return and the period.

Compound annual growth rate — the constant annual rate that would produce the observed total. It is the annualised figure, and it is what makes returns comparable.

No, which is its main limitation. A 15% return from a savings account and a 15% return from a speculative bet are not equivalent, and ROI cannot distinguish them.

Divide 72 by the annual rate to get the approximate doubling time. At 8% a year that is nine years, which is close to the exact 9.006.

ROI is a single total return; internal rate of return accounts for the timing of every cash flow. IRR is the right tool when money goes in and out over a period rather than once.

A nominal return of 6% during 4% inflation is a real return of about 1.9% — divide rather than subtract. Long-horizon comparisons should always be made in real terms.

It depends entirely on the asset class and the risk taken, and long-run averages differ substantially between them. Comparing any single investment against a relevant index matters more than against an absolute figure.

No, which is its main weakness alongside ignoring risk. Net present value discounts future cash flows and is the more complete measure.

Include every cost — purchase, fees, maintenance, void periods and eventual selling costs. Headline yields that ignore them overstate returns substantially.

Payback measures how long until you recover the outlay; ROI measures how much you gain in total. A short payback with a poor total return is possible, and so is the reverse.