What's the difference between ROI and ROAS?

ROI measures net profit as a percentage of total cost, after subtracting margin and other expenses. ROAS measures gross revenue per dollar spent on ads, without subtracting any costs. That's why ROAS numbers are almost always higher than ROI on the same campaign.

How do you calculate annualized ROI?

Annualized ROI = [(1 + total ROI)^(1/n) − 1] × 100, where n is the number of years. An 80% total ROI over 3 years works out to about 21.6% per year — very different from a naive 80% ÷ 3.

What counts as a good ROI?

It depends on the context: 7–10% annually is considered a solid long-run average for the US stock market, 6–10% for rental real estate, and 200–500% (or a 4–5x ROAS) is a common target in digital marketing.

What is payback period and how is it different from ROI?

Payback period is the time needed to recover your initial investment from net returns — Payback = Investment / Annual Net Return. Unlike ROI, it tells you how fast you get your money back, not how profitable the investment is overall.

ROI Calculator

Calculate return on investment instantly — simple ROI, annualized ROI, CAGR, and payback period for any investment. Free, no signup.

Updated May 2026

Amount Invested

Total cost of the investment or project.

Amount Returned

Total value realized after the period ends.

CALCULATION METHOD (G−C)/C

SYSTEM ACCURACY 100%

Results

ROI

0.00%

Net Profit $ 0.00

Investment Gain Ratio 0.00 : 1

Results are for educational purposes only and do not constitute financial advice.

How to use this ROI calculator

Simple or annualized, your choice

1. Choose a mode

Simple ROI for total return, or Annualized ROI to compare investments held for different lengths of time.

2. Enter the invested and returned amounts

Total cost and the amount received back — in annualized mode, also add the holding period in years.

3. Read the results

ROI %, net profit, gain ratio, annualized ROI, CAGR, and payback period.

What this ROI calculator does

Beyond simple ROI

Annualized ROI

Converts any total ROI into an equivalent yearly rate so you can compare investments fairly.

CAGR

Compound annual growth rate — the standard metric in fund reports and startup pitch decks.

Payback period

The time needed to recover the initial investment from net returns.

Runs entirely in your browser

No financial data is sent to a server — every calculation is instant and private.

Worked example

See the ROI formula applied to real numbers

Scenario

Result

A $5,000 campaign generates $18,000

ROI = 260% — $2.60 profit for every $1 invested

80% total ROI over 3 years

Annualized ROI = 21.6% per year

Invested $1,000, received back $800

ROI = −20% (a loss)

When you'll use this calculator

The most common scenarios among people who use this tool

Marketing campaigns

Check whether paid media or content generates more revenue than it costs — 300–500% is generally considered healthy.

Business projects

Decide whether a new hire, equipment purchase, or software subscription justifies its total cost.

Real estate

For rentals: (annual income − expenses) / investment. For flips: net profit / total invested.

Financial investments

Use annualized ROI to compare stocks, funds, and bonds held for different time periods on equal footing.

Common mistakes

Comparing ROI over different time periods without annualizing

60% over 2 years is not the same as 60% over 6 years — always annualize before comparing two investments.

Confusing ROI with ROAS

ROAS is gross revenue per dollar spent on ads; ROI subtracts all costs, including margin, from that revenue.

Ignoring inflation over long periods

Standard ROI doesn't adjust for inflation — for holding periods of 5+ years, use real ROI ≈ nominal ROI − inflation rate.

Why use this ROI calculator

It goes beyond simple ROI: annualized ROI, CAGR, and payback period are all calculated in one place, which matters when you need to compare investments with different holding periods fairly.

It works for any scenario — a marketing campaign, a business project, a rental property, or a financial investment — using the same formula and the same interface every time.

ROI vs. ROAS

Different metrics, not interchangeable

ROI

ROAS

Measures

net profit over total cost

gross revenue per dollar spent on ads

Subtracts costs

yes — margin, production, overhead

Best for

measuring overall profitability

measuring media efficiency

Frequently asked questions

ROI stands for Return on Investment — it measures how much profit you made relative to what you spent. The formula is ROI = [(Return − Investment) / Investment] × 100. A $5,000 investment that returns $18,000 has a 260% ROI.