Investment appraisal

Return on investment (ROI) calculator

ROI expresses gain as a percentage of what you put in. Its weakness is time: 50% over one year and 50% over five are very different outcomes, which is why annualised ROI matters.

Inputs

Result

Return on investment

65%

Net gain
USD 65,000
Annualised ROI
18.17%
Money multiple
1.65x
Average annual gain
USD 21,666.67
  • Compare annualised ROI, not raw ROI, when the holding periods differ.

How to use this calculator

  1. 1Enter the total amount invested, including implementation costs.
  2. 2Enter the value or total return received.
  3. 3Enter the holding period in years for the annualised figure.

Simple vs annualised

ROI = (final value − cost) / cost. Annualised ROI = (final / cost)^(1/years) − 1, which converts any holding period to a comparable yearly rate.

Compare the annualised figure to your cost of capital. A project returning 9% annualised while capital costs 12% destroys value even though the raw ROI looks positive.

Include the costs people forget

Implementation time, training, downtime during transition and ongoing subscription or maintenance all belong in cost. Excluding them is why so many software business cases overstate returns.

Where returns arrive unevenly across years, use the NPV and IRR tools instead — ROI assumes a single in and a single out.

Call this tool from the API

Every calculator on this site is also an endpoint. Get a free key from the developer page and call it from your product, spreadsheet or AI agent.

curl -X POST https://utopiavalue.co/api/v1/tools/roi-calculator \
  -H "Authorization: Bearer $UTOPIA_API_KEY" \
  -H "Content-Type: application/json" \
  -d '{"amountInvested":100000,"finalValue":165000,"years":3,"currency":"USD"}'

Frequently asked questions

What is a good ROI?

Anything comfortably above your weighted average cost of capital, adjusted for risk. For SME capital projects, most owners look for annualised returns above 20%.

Should ROI be before or after tax?

Be consistent. After-tax is more realistic for comparing against after-tax financing costs.

Why does my annualised ROI look low?

Because time is now in the denominator. A 100% return over eight years is only about 9% a year.