How to Calculate ROI — Formulas, Examples & What They Mean
This calculator gives you four ROI figures — from the simplest to the most accurate. Here's exactly what each formula means and when to use it.
1. Simple ROI
The foundational formula used by businesses, marketers, and investors worldwide. It tells you how much you earned for every dollar spent, as a percentage.
Example: $10,000 invested, returned $13,500 over 3 years
2. Annualized ROI (CAGR)
Simple ROI ignores time — a 35% ROI over 1 year beats 35% over 10 years. Annualized ROI (also called CAGR) converts your return to an equivalent yearly rate so you can compare investments fairly.
3. After-Tax ROI
Your reported gain is not your actual gain. Capital gains and income taxes reduce the real profit. After-Tax ROI shows what you actually keep.
4. Inflation-Adjusted (Real) ROI
Inflation erodes purchasing power. A 35% ROI with 3% annual inflation over 3 years isn't as valuable as it looks. Real ROI shows your actual gain in today's dollars.
What Does a Good ROI Look Like?
- Stock market (S&P 500): 7–10% annualized (historical)
- Real estate: 8–12% annualized (varies by market)
- Business investment: 15–30%+ is considered strong
- Marketing campaigns: 300–500% (a 5:1 return is the benchmark)
- Savings account (2026): ~4.5–5% (high-yield)
ROI Reference Tables — By Investment Amount & Return
Quick reference for common investment scenarios. Use the calculator above for your exact numbers.
Simple ROI by Investment Amount and Return (30% gain)
| Initial Investment | +10% Return | +25% Return | +50% Return | +100% Return | −20% Loss |
|---|---|---|---|---|---|
| $1,000 | $100 profit / 10% ROI | $250 / 25% | $500 / 50% | $1,000 / 100% | −$200 / −20% |
| $5,000 | $500 / 10% | $1,250 / 25% | $2,500 / 50% | $5,000 / 100% | −$1,000 / −20% |
| $10,000 | $1,000 / 10% | $2,500 / 25% | $5,000 / 50% | $10,000 / 100% | −$2,000 / −20% |
| $50,000 | $5,000 / 10% | $12,500 / 25% | $25,000 / 50% | $50,000 / 100% | −$10,000 / −20% |
| $100,000 | $10,000 / 10% | $25,000 / 25% | $50,000 / 50% | $100,000 / 100% | −$20,000 / −20% |
| $500,000 | $50,000 / 10% | $125,000 / 25% | $250,000 / 50% | $500,000 / 100% | −$100,000 / −20% |
Simple ROI vs Annualized ROI by Time Period (35% total gain)
| Total ROI | 1 Year | 2 Years | 3 Years | 5 Years | 10 Years |
|---|---|---|---|---|---|
| Simple ROI | 35% | 35% | 35% | 35% | 35% |
| Annualized ROI (CAGR) | 35.0% | 16.1% | 10.5% | 6.2% | 3.1% |
A 35% total gain earned over 10 years is only a 3.1% annualized return — equivalent to a savings account. Time period matters enormously.
After-Tax ROI at Common Tax Rates (25% gross ROI)
| Gross ROI | 0% Tax | 15% (LT CG) | 20% (LT CG) | 22% Income | 32% Income | 37% Income |
|---|---|---|---|---|---|---|
| 25% | 25.0% | 21.3% | 20.0% | 19.5% | 17.0% | 15.8% |
| 50% | 50.0% | 42.5% | 40.0% | 39.0% | 34.0% | 31.5% |
| 100% | 100.0% | 85.0% | 80.0% | 78.0% | 68.0% | 63.0% |
What Is a Good ROI? Industry Benchmarks by Sector
Context is everything. The same 20% ROI can be excellent in real estate and mediocre in venture capital. Here's what to expect across major sectors in 2026.
Financial Investments
- S&P 500 (historical avg): 7–10% annualized
- Individual stocks: −100% to 500%+ (highly variable)
- Bonds (2026): 4–5% annualized
- High-yield savings: 4.5–5% APY
- Real estate (rental): 8–12% annualized
- Real estate (flip): 20–40% per project
Business & Operations
- Small business avg: 7–10% annual return
- SaaS/tech: 20–50%+ (successful companies)
- Hiring (new employee): Target 3:1 revenue/cost
- Equipment purchase: 15–25% over asset life
Marketing ROI Benchmarks
- Email marketing: 3600–4200% (42:1 ratio)
- SEO: 500–2200% (over 12–24 months)
- Google Ads (PPC): 200–400% (2:1 to 4:1)
- Social media ads: 100–250%
- Content marketing: 300–500% (B2B average)
- Influencer marketing: 400–850% (micro-influencers)
Training & HR
- Employee training: 300–700% (productivity gains)
- Onboarding programs: Reduces turnover by 25–50%
- Health/wellness programs: ~3:1 ROI (reduced absenteeism)
ROI Calculator — Frequently Asked Questions
Answers to the most common questions about return on investment calculations, formulas, benchmarks, and adjustments.
More Free ROI Calculators
Specialized tools for every investment type — each uses the same methodology as this calculator.