ROI Calculator: How to Calculate Your Return on Investment

Return on Investment (ROI) is the most fundamental measure of whether an investment was worthwhile. Our free ROI calculator gives you ROI percentage, net profit, annualised return and investment multiple.

What is ROI?

ROI measures how much you gained or lost on an investment relative to how much you put in, expressed as a percentage.

Formula: ROI = (Net Profit divided by Cost of Investment) x 100 Where Net Profit = Final Value minus Initial Investment

How to use the calculator

1. Enter your initial investment
2. Enter the final value or return
3. Optionally enter the time period in years for annualised return
4. Click Calculate ROI

Real investment examples

Property investment: Buy at R1,500,000. Worth R2,100,000 five years later. Net profit: R600,000 ROI: 600,000 / 1,500,000 x 100 = 40% Annualised ROI: 6.96% per year

Stock investment: Invest $5,000. Worth $8,500 three years later. Net profit: $3,500 ROI: 3,500 / 5,000 x 100 = 70% Annualised ROI: 19.3% per year

Annualised ROI vs total ROI

Total ROI is the overall return. Annualised ROI (CAGR) is the equivalent yearly return, useful for comparing investments held for different time periods.

A 100% total ROI over 10 years is only about 7.2% per year — roughly in line with a basic index fund.

What is a good ROI?

• Savings account: 4-7% annually (low risk)
• Property: 6-10% annually including rental income (medium risk)
• Stock market index fund: 7-10% annually long term (medium risk)
• Small business: 10-30%+ if successful (high risk)

Frequently asked questions

What is a good ROI for property in South Africa? South African property has historically appreciated at 5-9% annually. Adding rental yield can bring total ROI to 8-12% in good areas.

How do I calculate ROI on stocks? Enter total cost including brokerage as initial investment and current total value including dividends as final value.

What does negative ROI mean? You lost money. If you invested R10,000 and it is now worth R7,000, your ROI is -30%.

Is ROI the same as profit margin? No. Profit margin measures profit as a percentage of revenue. ROI measures profit as a percentage of the investment cost.

How is ROI used in business? Businesses use ROI to decide where to allocate capital — whether to invest in new equipment, marketing, staff or other assets.