# Accurate ROI Calculator

For reference, per the Wall Street Journal, the U.S. S&P 500 index gained about 25% in 2023.

This ROI calculator (**return-on-investment**) calculates an annualized ROR (**rate-of-return**) using exact dates. This financial calculator allow you to compare the result of different investments. More below

### Information

To Quickly

Pick a Date

As a side benefit of this calculator's date accuracy, you can also use it to do date math calculations. That is, it will find the date that is "X" days from the start date or given two dates, it will calculate the number of days between them.

Calendar Tip: When using the calendar, click on the month at the top to list the months, then, if needed, click on the year at the top to list years. Click to pick a year, pick a month, and pick a day. Naturally, you can scroll through the months and days too. Or you can click on "Today" to quickly select the current date.

If you prefer not using a calendar, single click on a date or use the [Tab] key (or [Shift][Tab]) to select a date. Then, as mentioned, type 8 digits only - no need to type the date part separators. Also, because the date is selected, you do not need to clear the prior date before typing. If your selected date format equals mm/dd/yyyy, then for March 15, 2023, type 03152023.

### Recent: Your desired ROR

At some point, a user might need to know what they should pay for an investment to achieve a desired return-on-investment. Or what they need to sell it for if they have already entered into the invesetment.

With the most recent update, this calculator can now perform either calculation. All the user need do is provide the goal ROI (and click "Calc" to update). The calculator calculates the adjustment amount required for both the initial investment and the final value. It also calculates the absolute amount for both.

To double-check the accuracy of the results, copy and paste the value into the appropriate location and recalculate. The ROI should now equal your goal ROI (plus or minus a minimal rounding amount).

**And now for an essential word about ROI/ROR financial calculators.**

Because two different calculators may use different equations, don't compare the results from one ROI calculator for one investment with results from another calculator for a different investment. Always use the same calculator to compare two different investments.

### What is ROI?

ROI or return-on-investment is the annualized percentage gained or lost on an investment (ROR, or rate-of-return is the same calculation).

Enter the "Amount Invested" and the date the investment was made ("Start Date"). Enter the total "Amount Returned" and the end date.

You can change the dates by changing the number of days. Enter a negative number of days to adjust the "Start Date". Or as you change a date the "Number of Days" will update.

The results include the percentage gained or loss on the investment as well as the annualized gain or loss also expressed as a percent. The annualized return can be used to compare one investment with another investment.

Example: If you bought $25,000 worth of your favorite stock on January 2nd 2024 and sold it for $33,000 on June 7th 2025, you would gain $8,000 which is 32%. The annualized gain is 21.4%.

Now, let's say you made a second investment on January 2nd, 2024. This time, it was for $10,000, and you sold it for $11,000 on March 1st, 2024 (a leap year). The gain is only $1,000 or 10%. However, the annualized gain is 82.3%. Ignoring risk (which can be very dangerous), one would generally consider the latter investment to be better than the former.

## Stergios Mimidakis says:

Hello,

My calculations gave me a net profit of 400,000$ over 25 years on an initial investment of 150,000$. My total rate of return is 266% which, according to your calculator, comes out to an annualized rate of return of a little over 5%. But why is my annualized ROR not 10%, considering that 266% over a 25 year period comes out to that percentage (266% divided by 25 years)?

## Karl says:

Hi, this is an excellent question.

The short answer is because dividing the gross percentage return by the number of years invested is not the formula for calculating an annualized ROI. Dividing the gross percentage return by the number of years does not allow for the effect of compounding.

You can prove this to yourself two ways. First, do the arithmetic in reverse (I’m showing a bit more precision than the calculator so as to remove the rounding error):

The above clearly illustrates how a 10% return does not require the retention of the annual $16,000 growth within the investment. In other words, the $16,000 is being withdrawn.

The second way to prove the result is to use the future value calculator. Invest $150,000 for 25 years @ an annual compounded rate of 10% and the result is $1,625,205.89.

Hope this helps.

## Stergios Mimidakis says:

Wow, thank you very much for the quick response!

And your explanation definitely helps!

Sincerely,

Stergios

## Karl says:

You’re very welcome. My pleasure. And thank you for letting me know it was useful. 🙂

## Akinlolu says:

Thank you very much for this calculator. It is very much appreciated.

Quick question:

I want to invest $808,523.32 in a machine, this include utility bill, maintenance and tooling. The useful life of the machine is 20 years. Investing in this machine will save $276,942 annually. What would be the ROI?

Thank you

## Karl says:

The better calculator for this problem is the internal-rate-of-return calculator. The IRR calculator calculates an annualized rate-of-return when there’s a cash flow involved – in your case, that would be the savings per year.

But just a note, calculating the ROI might be more complex than just looking at the savings. Does this machine make a product that can be sold? If so, then some percentage of the profit should figure into the ROI as well.

## Tonia says:

If i invest $100,000 for 36 months and I get $140,000.00 at the end of my investment, what is my Rate on Return on an annual basis?

## Karl says:

Are you asking how to calculate this, or are you just saying how you are using the calculator?

## ROHIT says:

13.33% /year

## jimvsmij says:

If I invest $520,000 and I have annual overhead of $458,000/year and a profit of $600,000/year what would my ROI be over 5 years and 10 years?

## Karl says:

Since you are dealing with cash flows, you shouldn’t (can’t) use this calculator. Please use the IRR Calculator. IRR is an annualized return-on-investment calculation.

If you try the calculator, I think you’ll probably want to set the cash flows to annual.

You’ll enter $-520,000 as the initial investment (investments and expenses are entered as negative values), while returns are entered as positive values.

Do you take the profits out each year? Or are they retained. If retained, you’ll enter your expenses each year, and the sum or the profits as an ending value (+) at 5 years and 10 years.

Hope this gets you started.

## Rhonda says:

If my investor wants 10% interest on his 18 month $600,000 investment. How am I to calculate this?

Amount Invested (PV)?: $600,000.00

Amount Returned (FV)?: $692,304.00 OR $660,000 *

Days (-9,999 < # 1969)?: 10/15/2019

End Date (year < 2100)?: 04/15/2021

Gain or Loss: $92,304.00 OR $60,000 *

Percentage Gain or Loss: 15.3840% OR 10% *

Annualized Return (ROI): 10.0000% OR 6.5540% *

Total Years: 1.5

## Karl says:

The answer to your question depends on what your investor means when he says he "want 10% interest on his 18 month investment?"

Does he want 10% on an annualized basis? Then the answer is $692,304.

Or does he want a 10% gross return on his investment. Then the answer is $660,000. If your investor means this, then he is very generous, because if the payment slips to say June 15, 2021, the amount returned would not change.

Usually investors think in annualized terms when they are thinking about interest earned. Specifying an annual interest rate allows them to compare two investments with different terms.

## Rhonda says:

Thank you so much for the quick reply and clarification. Exactly what I needed!

## Karl says:

I’ll point one other thing out too. A 10% ROI is not exactly the same thing as a 10% interest rate. An interest rate gets into details about compounding and day count methods. An ROI or IRR (internal rate of return) eliminate these details from the calculation.

I’m mentioning this in case you consider this to be a loan. You can use this calculator to create a loan and have the calculator calculate the single payment amount with a 10% annual interest rate, and you’ll get a different answer than $692,304 – for the reasons mentioned. Neither answer is wrong. What it comes down to, is you both agreeing on what is meant.

## Ken says:

I have used your ROI calculator every day for years, but the last few days it does not compute. I enter the dates, amount invested and current amount, but it will not tell me my end-of-year ROI. What’s happened?

## Karl says:

Oh, that’s not good. I can confirm that the calculator works. What most likely happened is this. I made an update this week and it’s possible that your browser has cached (retained) some of the old programming code which is not compatible with the change. If that’s what has happen, it is easy to fix. Do a "hard refresh." If you are using Chrome on Windows, you can do that with Ctrl-F5. Here’s some more info about hard refresh which might be useful.

If a hard refresh does not fix the problem for you, please give me an example of a calculation that does not work, and I’ll test on my end.

Also, if above does not work, do you have another browser installed that you can try?

## Ken says:

Thanks, Karl, The “hard refresh” (ctrl-F5) worked. Thanks for this great ROI calculator.

## Karl says:

Thanks for letting me know, and you’re welcome. Glad to hear it’s of use to you.

## Chris says:

I’m not sure if what I’m looking for will really work – but we are looking to bring on a new service line. Total cost of capital required (69,308.09) + service agreement (83,777) for 2 year agreement should yield a low estimate of 60 procedures performed. Each procedure averages $4,021.

PV 153,085.09

FV 241,260

Is this an appropriate use of the calculator? Thank you.

## Karl says:

It seems as if your investment has a cash flow component. Therefore, if I understand you correctly, this calculator would not be the right one. You should use the IRR Calculator. The IRR calculator is used to calculate an annualized return when there is a cash flow.

## ShahG says:

I have an investment of 170,000 in ETFs that provides periodic dividends ( total of $1800 for the year) – that are fully reinvested. At the end of the year, my investment has grown to 178,000 in market value. How would I use the above calculator?

In my simple mind, my ROR is 178000/170000, or 4.70%.

And if this is not the right calculator, what is the right way?

## Karl says:

Your math is correct, but it’s a gross percentage return. If the investment ($170,000) was made on Oct. 2, 2017 and the value today is $178,00, the annualized return would not be 4.7%. It would be something less.

This calculator is fine to use. It will calculate an annualized ROI which allows you to compare the performance of say different ETFs with differing periods of ownership.

## Karl says:

I’ll add, it the investment of $170,000 was not made on the same date, but rather it represents a series of investments, then you’ll need to use this IRR calculator so that you can capture the different investment dates.

## Shahg says:

Just to clarify,

There was one time – one shot investment of $170,000 on April 1, 2018. The 1,800 in dividends came in 3 tranches – July 1 2018, October 1 2018 and January 1 2019. All were reinvested back. Then on March 31, 2019, the market value of original 170,000 PLUS 3 dividend reinvestments totalling 1,800, was 178,000.

## Karl says:

Understood. This ROI calculator will do what you want, but your math will work as well, since the term is one year.

Note, one year for this calculator, is April 1, 2018 to April 1, 2019. The dates are start of day.If the end date is set to March 31, then that will be 24 hours short of a year.