ROI Calculator
Enter your investment cost and net return to calculate ROI percentage, annualised return, and payback period.
How ROI Calculator works
ROI formula
ROI = (Net Profit ÷ Investment Cost) × 100. Net Profit = Total Return − Investment Cost. A 100% ROI means you doubled your money; a 50% ROI means you gained half of what you invested.
Annualised ROI (CAGR)
Simple ROI does not account for the time taken to generate the return. Annualised ROI — also known as Compound Annual Growth Rate (CAGR) — normalises returns across years. Formula: CAGR = (Return ÷ Cost)^(1÷Years) − 1. A 100% total ROI over 5 years is an annualised return of 14.9%.
Payback period
The payback period is the time for cumulative returns to equal the initial investment. It assumes the return is generated evenly over the investment period. A shorter payback period generally indicates lower risk.
What counts as a good ROI?
For business investments, a common benchmark is 10–15% annualised ROI. Marketing investments often target 3–5× ROI (200–400%). The right threshold depends on your cost of capital, risk, and opportunity cost of alternatives.
Frequently asked questions
What is a good ROI?
This depends on the type of investment. For long-term equity investments, 7–10% annualised is commonly cited (based on historical stock market returns). For business investments, many firms target 15–25% ROI. Marketing campaigns often aim for 3–5× return (200–400% ROI).
What is the difference between ROI and CAGR?
ROI measures total return regardless of time. CAGR (Compound Annual Growth Rate) annualises that return so you can compare investments of different durations on equal terms.
Does ROI account for risk?
No. ROI only measures return relative to cost. Higher-risk investments may offer higher headline ROI, but risk-adjusted returns (such as Sharpe ratio) are needed to compare investments with different risk profiles.
How do I calculate ROI for a marketing campaign?
Marketing ROI = (Revenue attributable to campaign − Campaign cost) ÷ Campaign cost. Be careful to attribute revenue correctly — multi-touch attribution complicates this in practice.
Related calculators