ROI Calculator
Calculate return on investment from gain, cost, and holding period.
This page is an editable estimator with realistic defaults so you can model your own situation in minutes.
ROI = (gain - cost) / cost.
Treat the result as a planning estimate and verify important numbers with the relevant official source before acting.
| Cost | $25,000 | |
|---|---|---|
| Gain/value | $36,000 |
Assumptions
- Use current books, contracts, invoices, and lender terms where possible.
- Taxes, fees, refunds, timing, financing, and accounting methods can change real results.
- This is a planning estimate, not financial, legal, lending, accounting, or tax advice.
How this calculator works
Formula used
ROI = (gain - cost) / cost.
Example calculation
Plug in your own numbers and the result updates instantly. ROI = (gain - cost) / cost.
How this calculator estimates the result
The calculator computes simple ROI as (ending value − cost) / cost, expressed as a percentage. When you enter a holding period in years, it also computes an annualized ROI using the compound-growth form ((ending value / cost)^(1 / years)) − 1, so that returns over different time horizons can be compared on a like-for-like basis.
Assumptions baked in
- Single upfront cost and a single ending value (or total gain).
- Holding period entered in years (decimals allowed for partial years).
- All cash returns are realized at the end of the period.
- No interim contributions, withdrawals, dividends reinvested separately, or taxes.
What this calculator does not do
- Does not handle multiple cash inflows over time — use the IRR calculator instead.
- Does not subtract transaction fees, commissions, or taxes.
- Does not adjust for inflation or risk; two investments with identical ROI can have very different risk profiles.
- Annualized ROI assumes geometric compounding, which can exaggerate returns over short holding periods.
A step-by-step example
Scenario: Invested $25,000 in a piece of equipment, sold/used for $36,000 in total value after 2 years.
- Profit = $36,000 − $25,000 = $11,000.
- Simple ROI = $11,000 / $25,000 = 0.44 = 44%.
- Annualized ROI = ($36,000 / $25,000)^(1/2) − 1 = (1.44)^0.5 − 1 ≈ 0.2000.
Result: Simple ROI of 44% over 2 years, or roughly 20.0% annualized — useful for comparing this project to an alternative with a different holding period.
Official references
- SEC Investor.gov – Compound Interest Calculator
- U.S. Small Business Administration – Financial Projections
- CFA Institute – Performance Measurement
Sources open in a new tab. Numbers in formulas and brackets above reflect the most recent publicly available values at the time of writing and are reviewed periodically by the TDL Expert Panel.
ROI Calculator FAQ
Is this roi calculator financial or tax advice?
No. It is an educational estimate only and does not replace a CPA, attorney, tax professional, lender, bookkeeper, or financial advisor.
Why might my actual result differ?
Real results can change because of taxes, state rules, fees, financing terms, accounting methods, refunds, seasonality, entity structure, payroll setup, and business-specific facts.
Should I verify before making a decision?
Yes. Confirm business, loan, tax, pricing, entity, and investment decisions with qualified professionals and actual contracts, invoices, books, and tax forms.