ROI Calculator Calculate return on investment for stocks, real estate, marketing, and business projects — with annualized...
ROI Calculator
Calculate return on investment for stocks, real estate, marketing, and business projects — with annualized, cash flow, and benchmark analysis.
Simple ROI** = $$\frac{\text{Gain} - \text{Cost}}{\text{Cost}} \times 100\%$$
→ Quick snapshot, but ignores time and compounding.
Annualized ROI (CAGR)** = $$\left( \frac{\text{Final Value}}{\text{Initial Investment}} \right)^{\frac{1}{n}} - 1$$
→ Reflects *compounded* yearly growth. Always use for multi-year comparisons.
IRR (Internal Rate of Return)** = Discount rate where NPV = 0
→ Best for irregular cash flows (e.g., startup investments).
ROAS (Return on Ad Spend)** = $$\frac{\text{Attributed Revenue}}{\text{Ad Spend}}$$
→ Marketing-specific; 5:1 = $5 revenue per $1 ad.
Example** ($50K → $92K in 7 yrs): • Simple ROI = ($92K − $50K) / $50K = **84%** • Annualized = $(92,000 / 50,000)^{1/7} - 1$ = **10.3%** • → Matches S&P 500 long-term (~9.8%) ✅
⚠️ Avoid these common errors:
- Ignoring time** — 84% ROI over 1 yr ≠ 84% over 7 yrs
- Cherry-picked timeframes** — “+50% in Q1!” (but −20% in Q4)
- Survivorship bias** — only counting winners, not failed projects
- Opportunity cost omitted** — $100K in Project A vs. $110K in Index Fund
✅ Pro Tips**:
- Always report **annualized ROI** for fair comparisons
- Use **IRR for capital budgeting** (NPV > 0 and IRR > hurdle rate)
- Compare to benchmarks: 9.8% (S&P), 5–7% (real estate), 25%+ (VC)
| Asset/Project | Simple ROI | Annualized | Timeframe |
|---|---|---|---|
| S&P 500 (Long-Term) | — | 9.8% | 30+ yrs |
| Rental Property (Cash) | 37.5% | 7.5% | 5 yrs |
| Marketing Campaign | 500% | — | Quarterly |
| Startup (Top Quartile) | 2000%+ | 25%+ | 7–10 yrs |
📉 Rule of Thumb Benchmarks**:
- Equities**: ≥8% annualized
- Real Estate**: ≥6% cap, ≥10% cash-on-cash
- Marketing**: ≥300% ROI (3:1 ROAS)
- Business Projects**: ≥12% IRR (cost of capital + risk premium)
➡️ Simple ROI
“$50K in, $92K out — what’s my total return?”
➡️ Annualized ROI
“Same $50K→$92K in 7 years — what’s my yearly growth rate?”
➡️ Cash Flow ROI
Model $100K investment with $30K/yr returns — see IRR.
➡️ Marketing ROI
“$10K ad spend → $60K revenue — was it worth it?” (ROAS = 6x)
Note: IRR uses Newton-Raphson solver. Assumes reinvestment at same rate (like CAGR).