Money
ROI Calculator
Enter what you put in, what you got back, and how long it took.
The link carries your figures, so it reopens on exactly these numbers.
The same 50% over different holding periods
Your figures, held for longer or shorter. The ROI column never moves — the gain is the gain. Everything that matters is in the two rates beside it, and that is the whole argument for never comparing two investments on ROI alone.
| Years held | Return on investment | Annual rate | Annual rate after inflation |
|---|---|---|---|
| 1 yearExcellent — and the same ROI as the last row. | 50% | 50% | 47.06% |
| 3 years | 50% | 14.47% | 12.23% |
| 5 yearsThe figures above. | 50% | 8.45% | 6.32% |
| 10 years | 50% | 4.14% | 2.1% |
| 20 yearsBarely above inflation. Twenty years of risk for the purchasing power of a current account. | 50% | 2.05% | 0.05% |
The formula
Worked example
10,000 invested, 15,000 back after 5 years, inflation at 2%
- 15,000 − 10,000 = 5,000 gain
- 5,000 ÷ 10,000 = 50% ROI
- (15,000 ÷ 10,000) ^ (1 ÷ 5) = 1.0845, so 8.45% a year
- 1.0845 ÷ 1.02 = 1.0632, so 6.32% a year in what it buys
Where this goes wrong
Reading a positive ROI as money made
A 50% return sounds like half your money again, and over twenty years it is almost nothing: 2.05% a year, against inflation of 2%, leaves 0.05% a year in purchasing power. The ROI never changed — only the time it took, which the number does not carry. That is why the same 50% is excellent over one year and a loss of time over twenty, and why the annual rate, not the ROI, is the figure to compare.
Questions
- Why is the annual rate not the ROI divided by the years?
- Because returns compound. Dividing 50% by five gives 10% a year, but 10% a year for five years turns 10,000 into 16,105, not 15,000. The right question is which yearly rate, repeated five times, lands exactly on your final figure — and that is a fifth root, not a division.
- Should the inflation rate be the average over my holding period?
- Yes, and the default is not it. Two percent is the target a central bank aims at over the long run, not what any particular decade delivered. If you held through a period you remember as expensive, put that number in — the rate after inflation is only as honest as the rate you feed it.
- Does this include what I paid in fees and taxes?
- Only if you subtract them yourself before entering the amounts. That is the oldest disagreement about ROI: two people can compute it on the same investment and differ by several points purely on what they counted as cost. Enter what actually left your account and what actually came back, and the answer describes your investment rather than a brochure.
- What about money added or taken out along the way?
- This page assumes one amount in and one amount out. Regular contributions change the question — each instalment has its own holding period — and that is the compound interest calculator, not this one.