ROI Calculator

How this result is built

Measure total and annualized return on investment from cost, amount returned, and years.

Return on investment is the gain divided by the cost. It is a complete-picture percentage, and it hides time. A 40% ROI over four years is not the same result as 40% in one year. The annualized line puts the time back in.

What the opening example is for

Include every dollar that came back: sale proceeds, dividends, and interest. Leave them out and the ROI describes a partial trade.

The walkthrough below uses the numbers already sitting in ROI Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “Amount invested” line on ROI Calculator starts at $8,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

ROI Calculator treats “Amount returned” as its own entry, and the form opens with $11,200.00. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Before you replace it, “Years” reads 4 on ROI Calculator. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

The opening result, line by line

Press Calculate on the opening form and Return on investment is 40.00%. That is the number the rest of this section is talking about.

Gain is $3,200.00 when you run the opening figures on ROI Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, annualized return is 8.78%. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

ROI Calculator reports that years is 4.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

The formula line on the page is ROI = (Return − Cost) / Cost. It is there so you can see the relationship the buttons are using. A schedule, when the page draws one, is that same series written row by row.

A second pass changes only “Amount invested”, from $8,000.00 to $8,800.00. Return on investment moves from 40.00% to 27.27%. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on ROI Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

ROI Calculator compounds the rate you type. Markets do not pay a flat rate, and a fund fee comes out of the return before you should type it. The page is the equation, not a forecast and not a recommendation to buy or sell.

ROI Calculator stops at its own formula. When the next question is different, open CAGR Calculator (One smooth rate between two values.); IRR Calculator (The rate that sets NPV to zero.); Investment Calculator (Starting balance plus a monthly contribution.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on ROI Calculator by reading the labels, not the headline. The opening labels are Amount invested ($8,000.00), Amount returned ($11,200.00), Years (4). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on 40.00%. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. ROI Calculator is built for one job: Total ROI and the annualized rate. The description on the page says the same thing in a sentence: Measure total and annualized return on investment from cost, amount returned, and years.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, ROI Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read 40.00% as the output of the fields above and nothing else.

FAQs