Return on investment (ROI) calculator
Quickly measure your return on investment (ROI) and growth potential with InvoiceFly’s free, mobile-friendly ROI Calculator. No Excel formulas, no guesswork—just clear, data-driven insights you can apply to marketing campaigns, equipment purchases, real estate deals, or any business project.
ROI Calculator: Calculate Your Investment Returns
Your ROI Results
ROI Calculator
Table of Contents
Why Use Our ROI Calculator?
Manual ROI calculation can be error-prone and time-consuming. Whether you’re evaluating an advertising campaign’s profitability, deciding on a new piece of machinery, or comparing rental property investments, our tool helps you:
- Save time with an intuitive app-style interface—no software purchase needed.
- Eliminate formula mistakes by automating the ROI calculation for you.
- Compare simple ROI vs. annualized ROI vs. compound annual growth rate (CAGR) side by side.
- Test “what-if” scenarios in seconds by adjusting inputs.
Key Features of the ROI Calculator
- Amount Invested & Amount Returned: Enter your total cost and final proceeds—whether it’s ad spend or equipment price.
- Investment Period Slider: Set your timeframe in years to see annualized returns and compound growth.
- Simple ROI Formula: Calculates
- Simple ROI = (Gain – Cost) ÷ Cost × 100%
- CAGR Calculation: Shows how your investment compounds over time with
- CAGR = [(Ending Value ÷ Beginning Value)^(1 ÷ Years) – 1] × 100%
- Real-Time Chart & Table: Visualize total gain, ROI percentage, simple annual ROI, and CAGR in an interactive dashboard.
- Mobile-First Design: Fully responsive on iPhone, Android, tablet, and desktop—no app install required.
- Scenario Comparison: Save multiple calculations to compare different marketing strategies, software purchases, or rental property deals.
How to Calculate ROI: ROI Calculation Formula
The basic calculation of ROI is straightforward:
- ROI = (Gain from Investment – Cost of Investment) ÷ Cost of Investment × 100%
- Gain from Investment is the amount you ended up with (e.g., sales revenue, resale value).
- Cost of Investment is what you initially put in—equipment, advertising budget, or purchase price.
Annualized ROI vs. Simple ROI
Because ROI doesn’t include time, comparing investments of different lengths can be misleading. Our ROI Calculator solves this by offering:
- Simple ROI: Total gain divided by cost, regardless of period.
- Simple Annual ROI: Divides simple ROI by the number of years to show an average yearly return.
- CAGR (Compound Annual Growth Rate): Reflects compound interest over multiple years—ideal for long-term projects and real estate.
Step-by-Step Guide to Using the ROI Calculator
- Enter Amount Invested
Type in the total cost of your investment—whether that’s equipment purchase, marketing spend, or real estate down payment. - Enter Amount Returned
Input your final proceeds, like revenue generated from a campaign or resale value of property. - Select Investment Period
Use the slider or type in the number of years. Our tool automatically calculates annualized ROI and CAGR for you. - Review Your Results
Instantly see:- Total Gain on Investment (returned minus invested)
- Return on Investment (ROI %)
- Simple Annual ROI (% per year)
- Compound Annual Growth Rate (CAGR %)
- Analyze the Chart & Table
Explore an interactive chart that breaks down your profit and cost. View a detailed table of values. - Adjust Inputs & Compare Scenarios
Change any field—investment amount, return, or period—to instantly see updated ROI figures. Save multiple scenarios for side-by-side comparison.
Real-World Examples
Marketing Campaign ROI
- Investment: $8,000 in digital ads
- Return: $12,400 in sales over 6 months
- Simple ROI: (12,400 – 8,000) ÷ 8,000 × 100% = 55%
- Simple Annual ROI: 55% × (12 ÷ 6) = 110%
- CAGR: [(12,400 ÷ 8,000)^(1 ÷ 0.5) – 1] × 100% ≈ 110%
Equipment Purchase ROI
- Investment: $50,000 on a new machine
- Return: $75,000 in cost savings over 3 years
- Simple ROI: (75,000 – 50,000) ÷ 50,000 × 100% = 50%
- Simple Annual ROI: 50% ÷ 3 = 16.7%
- CAGR: [(75,000 ÷ 50,000)^(1 ÷ 3) – 1] × 100% ≈ 14.5%
Rental Property ROI
- Investment: $200,000 purchase price + $20,000 renovation
- Return: $30,000 net rental income per year
- Period: 2 years
- Simple ROI: [(60,000 – 220,000) ÷ 220,000] × 100% = –72.7% (negative ROI reflects cost > return)
- Simple Annual ROI: –36.4%
- CAGR: [(160,000 ÷ 220,000)^(1 ÷ 2) – 1] × 100% ≈ –13.1%
ROI vs. Other Metrics
| Feature | ROI Calculator | Manual Excel Formula | Traditional Accounting |
|---|---|---|---|
| Ease of Use | One-click calculation | Custom formula setup | Time-consuming process |
| Time-Adjusted Metrics | Simple ROI, Annual ROI, CAGR | Manual time adjustments | Often ignores time value |
| Visualization | Interactive charts and tables | Static spreadsheet view | No visualization tools |
| Scenario Comparison | Save and compare multiple scenarios | Duplicate worksheets manually | Not available |
| Export Options | CSV export for Excel and Google Sheets | Native CSV export | Requires additional software |
ROI Calculator Frequently Asked Questions (FAQs)
You calculate return on investment (ROI) by comparing your net gain to your original cost:
ROI = (Gain from Investment – Cost of Investment) ÷ Cost of Investment × 100%
“Gain” is what you ended up with (e.g., revenue, resale value). “Cost” is what you put in (e.g., purchase price, ad spend).
The standard ROI formula is:
ROI (%) = (Net Profit ÷ Cost of Investment) × 100%
Where:
- Net Profit = Gain from Investment – Cost of Investment
- Cost of Investment = Initial outlay (equipment, marketing budget, property down payment, etc.).
A 10% ROI can be considered solid if it’s annualized and aligns with your risk profile.
- Low-risk contexts (e.g., savings accounts): 10% is excellent.
- Higher-risk contexts (e.g., stocks, real estate): 10% may be average or below market.
Always compare ROI to benchmarks in your industry, inflation, and alternative opportunities.
Yes. In Excel you can calculate ROI with a simple cell formula. For example, if A1 is “Cost” and B1 is “Gain”:
=(B1–A1)/A1
Then format the cell as a percentage.
For future value at a given ROI, use the FV function:
=FV(rate, periods, 0, –cost)
- Write down what you spent (Cost).
- Write down what you got back (Gain).
- Subtract Cost from Gain to get Net Profit.
- Divide Net Profit by Cost.
- Multiply by 100 to turn it into a percentage.
A 500% ROI means your net gain is five times your original investment.
If you invested $1,000, a 500% ROI yields $5,000 in profit—so you end up with $6,000 total.
The “good” ROI formula is the standard one:
ROI = (Gain – Cost) ÷ Cost × 100%
For time-adjusted comparisons, combine with annualization or CAGR:
Simple Annual ROI = ROI ÷ Years
CAGR = [(Ending Value ÷ Beginning Value)^(1 ÷ Years) – 1] × 100%
- Ignoring fees & taxes: Omitting origination or transaction costs.
- Overlooking timeframe: Comparing multi-year ROI to one-year results.
- Mixing net vs. gross values: Using revenue instead of profit.
- Neglecting compounding: Failing to annualize or calculate CAGR.
- Inconsistent cost bases: Including different expenses in “Cost” across comparisons.
That depends on your expected annual return. Use the compound-growth formula:
- Future Value = \$20,000 × (1 + r)^10
For example, at 7% annual growth:
- FV ≈ 20,000 × (1.07)^10 ≈ \$39,343
Adjust “r” to your target ROI to model different scenarios.
