ROI Calculator

The most common mistake is entering only the profit as "Return" instead of the total value received back. This calculator's Return field expects the full amount you got back, including your original investment -- if you put in $10,000 and it grew to $15,000, Return is $15,000, not $5,000. Entering just the $5,000 profit as Return would produce a wildly wrong (and wildly negative-looking, once subtracted again) result, since the calculator subtracts Investment Cost from whatever you type into Return.

It depends entirely on the asset class, the time period, and the risk taken to get there -- there is no single universal benchmark. A common reference point is the long-run average annual return of the U.S. stock market, often cited around 10% nominal, or roughly 7% after inflation, which is why the Annualized ROI figure matters more than the headline ROI for comparing a multi-year investment against that kind of benchmark. A short-term flip with a high ROI can still be a worse decision than a longer-term investment with a lower ROI, once the time and risk involved are accounted for.

Time Period only feeds into Annualized ROI -- it has no effect on the headline ROI percentage or Net Profit, both of which are computed purely from Investment Cost and Return. Annualized ROI converts the total return into a compounded yearly rate, so stretching the same dollar gain over more years lowers the annualized figure even though the total ROI and Net Profit stay exactly the same.

Yes -- ROI goes negative whenever Return is less than Investment Cost, meaning you got back less than you put in. An ROI of -100% means Return was $0, a total loss of the investment; ROI cannot fall below -100% in this calculator, since Return has a floor of $0 and cannot go negative, but Net Profit itself can still be any negative dollar amount up to the full Investment Cost.