Calculate return on investment and annualized ROI for any business decision, marketing campaign, or financial investment.
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Initial Investment$10,000
$100$500K$1M
Final Value / Revenue Generated$14,800
$0$1M$2M
Time Period (months)18 months
1 mo5 yrs10 yrs
Return on Investment
48%
total ROI over 18 months
Annualized (CAGR): 30.2% · Net profit: $4,800
$4,800
Net Profit
30.2%
Annualized ROI
1.48x
Return Multiple
$267
Avg Profit/Month
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ROI vs Annualized ROI: Which Should You Use?
Simple ROI is useful for comparing identical time periods. But when comparing a 6-month marketing campaign (50% ROI) against a 3-year business expansion (120% ROI), raw ROI is misleading. The campaign actually outperforms: 50% over 6 months annualizes to ~125% per year, while 120% over 3 years is only 30% annualized.
Annualized ROI (CAGR) puts every investment on equal footing by converting to a per-year rate. It's the standard metric used by investment analysts, venture capitalists, and financial planners. Always use CAGR when comparing investments with different durations.
How is ROI calculated?
ROI = (Final Value - Initial Investment) ÷ Initial Investment × 100. A $10,000 investment returning $14,800 has a 48% ROI. Simple and quick, but doesn't account for time.
What is a good ROI for a business investment?
For business investments, 15–30% annually is considered solid. Marketing campaigns often target 200–400% ROI (every $1 spent returns $3–$5). Below the risk-free rate (~4–5%) means the investment isn't compensating for risk.
What is annualized ROI (CAGR)?
CAGR = ((Final/Initial)^(1/years) - 1) × 100. It answers: "what consistent annual return would produce this result?" Use it to compare investments with different time horizons.
What does a 100% ROI mean?
100% ROI means you doubled your money — the investment returned its full cost in profit. In different contexts: a marketing campaign with 100% ROI breaks even (gained back what you spent). In investing, 100% ROI over 5 years = 14.9% annualized — decent but not extraordinary.
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