How to Calculate ROI
ROI = (Gain − Cost) ÷ Cost × 100%
Annualized = ((1 + ROI)^(1/years) − 1) × 100%
Frequently Asked Questions
What is a good ROI? It depends on the investment type. The S&P 500 averages ~10% annually. Real estate averages 8-12%. A good ROI beats inflation (3-4%) at minimum.
Why use annualized ROI? Annualized ROI allows fair comparison between investments held for different periods.