ROI on 1000 investment - calculate your return

What does a 30% return actually mean after fees and inflation?

A rental property sold for $480,000 after buying it for $350,000 looks like a 37% gain. Add $45,000 in renovation, legal fees and property tax, and the real ROI drops to 21.5%. Spread that over 5 years and the annualized return is 3.96% - barely above a savings account. The ROI Calculator does this math for you: enter the initial cost, total revenue, any additional expenses and the holding period. You get a simple ROI percentage, annualized ROI, net dollar profit and a benchmark comparison - all in one result.

How to use the ROI Calculator - step by step

Investment cost ($) - the total amount you put in at the start. Purchase price, initial deposit, startup capital. For stocks: total cost of shares bought. For real estate: purchase price without extras (those go into the next field).
Revenue / current value ($) - what you got back or what the investment is worth now. For stocks: current portfolio value or sale proceeds. For real estate: sale price plus any rental income earned. For a business: total revenue generated by the campaign or project.
Additional costs ($) - broker commissions, notary fees, renovation costs, taxes, insurance, maintenance. Optional but important: skipping this field gives you a "clean" ROI that overstates the real return.
Years and months - how long you held the investment. The calculator uses this to compute annualized ROI (CAGR). Leave both blank if you only need the simple percentage.
Read the results - you get ROI as a percentage, net gain or loss in dollars, annualized ROI if a period was entered, a full calculation breakdown table, and a benchmark comparison.

ROI benchmarks by asset class

These are long-term historical averages. Individual results vary widely by timing, location and strategy.

Asset class	Typical annual ROI	Notes
Savings account / CDs	4-5%	Near-zero risk, fully liquid. Barely keeps up with inflation.
Government bonds (10Y)	4-6%	Low risk, fixed income. Sensitive to interest rate changes.
S&P 500 (stocks)	8-10%	Long-run average (nominal). High volatility in short periods.
Real estate (rental)	6-12%	Depends heavily on location, leverage and management costs.
Digital marketing (ROAS)	200-500%	Measured per campaign. Highly variable. Excludes overhead.
Startup / venture	-100% to 1000%+	Most fail. Survivors can return 10-100x. High-risk, high-reward.

6 practical examples with real numbers

Example 1 - Stock purchase: Bought shares for $20,000, sold after 1 year for $24,600, broker commission $200.
Result: ROI = 21.78%, net profit $4,400. Without the commission ROI would be 23.00% - a 1.22 percentage point difference.

Example 2 - Rental property (5 years): Bought for $350,000, additional costs (renovation, legal, tax) $45,000. Sold after 5 years for $480,000 plus $90,000 rental income.
Result: ROI = 44.30%, annualized ROI = 7.61%, net profit $175,000.

Example 3 - Google Ads campaign: Spent $5,000 on ads, generated $18,500 in sales.
Result: ROI = 270.00%, net profit $13,500. For every dollar spent, $2.70 came back as profit.

Example 4 - S&P 500 ETF (10 years): Invested $100,000, current value $215,900, fees $1,200.
Result: ROI = 113.24%, annualized ROI = 7.89%. Close to the historical 8-10% average.

Example 5 - Failed startup: Invested $50,000, recovered $8,000 in assets after 2 years.
Result: ROI = -84.00%, loss $42,000. The annualized loss: -60.25% per year.

Example 6 - Short-term crypto trade: Bought for $3,000, sold after 4 months for $4,500, exchange fees $45.
Result: ROI = 47.70%, annualized ROI = 175.15%. The annualized figure looks extreme because 4 months is extrapolated to a full year - do not assume it is sustainable.

FAQ - Frequently asked questions

What is the difference between simple ROI and annualized ROI?

Simple ROI measures the total return over the entire holding period: (Revenue - Cost) / Cost x 100%. A 50% ROI over 5 years and a 50% ROI over 6 months look identical in simple terms, but the second is far better. Annualized ROI (also called CAGR) adjusts for time: it tells you the equivalent annual growth rate. The 5-year example annualizes to 8.45% per year, while the 6-month one annualizes to 125%. Always compare investments using annualized ROI when they have different holding periods.

What is a good ROI?

It depends on the asset class and risk. For stocks: 8-10% annualized is the long-run S&P 500 average. For rental property: 6-12% annualized after all costs. For marketing campaigns: a minimum 200-300% simple ROI is typically expected (for every $1 spent, $2-3 in profit). For business investments: anything above the company's cost of capital (usually 10-15%) creates value. Below the savings account rate (~4-5%) means the capital would have been better off in a risk-free instrument.

Should I include taxes in the cost?

For a pre-tax ROI: no. For an after-tax ROI: yes. The calculator lets you add taxes under "Additional costs." Capital gains tax, property tax, transaction tax - include them all to see the real net return. Example: a $10,000 stock gain taxed at 15% reduces the profit by $1,500, which can drop the ROI by several percentage points. If comparing investments in different tax regimes (tax-sheltered vs taxable account), always calculate after-tax ROI to get an apples-to-apples comparison.

Can ROI be negative?

Yes. Negative ROI means the investment lost money - you got back less than you put in. An ROI of -20% means 20 cents lost for every dollar invested. Common causes: asset price decline, underestimated costs, market timing errors. Even with a negative ROI, always verify that the revenue field includes all returns (dividends, rental income, partial recoveries, tax benefits) - investors often undercount indirect returns.

Why is annualized ROI different from dividing total ROI by years?

Because of compounding. A 50% total ROI over 5 years is not 10% per year - it is 8.45% per year (because each year's gain compounds on the previous one). The formula is: Annualized ROI = ((1 + ROI/100)^(1/years) - 1) x 100%. Dividing by years (simple average) overestimates short-period performance and underestimates long-period performance. The annualized figure (CAGR) is the industry standard for comparing investments.

What are the limitations of ROI?

Three main ones. First, ROI ignores risk - a 15% return from speculative stocks and 15% from government bonds are very different even though the ROI is the same. Use the Sharpe Ratio Calculator for risk-adjusted comparisons. Second, ROI ignores cash flow timing - $10,000 received in Year 1 is worth more than $10,000 in Year 5. Use NPV or IRR for multi-year projects with uneven cash flows. Third, ROI ignores opportunity cost - a 6% ROI looks good until you realize a risk-free bond pays 5% without effort or volatility.

Related tools

NPV Calculator

Calculate the net present value of a multi-year investment with yearly cash flows and a discount rate - See calculator

IRR Calculator

Find the internal rate of return that makes NPV equal zero for any series of cash flows - See calculator

Sharpe Ratio Calculator

Measure risk-adjusted portfolio efficiency using return, volatility and the risk-free rate - See calculator

Compound Interest Calculator

Project how an investment grows over time with monthly contributions and compound interest - See calculator

Stock Profit Calculator

Calculate net profit or loss from a stock trade after broker commissions - See calculator

What is the ROI on a 1000 investment?

Parameters