The ROI Formula
ROI (%) = (Final Value − Initial Investment) ÷ Initial Investment × 100
ROI vs. CAGR — Why Time Matters
ROI is a simple, time-independent measure — it doesn't matter whether your gain happened over 1 year or 10 years, the ROI percentage is the same. This makes ROI easy to calculate but less useful for comparing investments held over different time periods. For a time-adjusted (annualized) return, use our CAGR-based Investment Return Calculator instead.
Common Uses
- Evaluating a specific investment, business project, or marketing campaign's overall return
- Comparing the total return of investments held over similar time periods
- Quick back-of-envelope profitability checks