ROICALCULATOR
Calculate your Return on Investment, annualised rate, and total gain from any investment. Enter the amount invested, the amount returned, and the time period.
Formula
ROI = (Gain ÷ Amount Invested) × 100
Annualised ROI = (Return ÷ Invested)^(1÷Years) − 1
Calculate
What Is ROI?
Return on Investment (ROI) is a financial ratio that measures the profitability of an investment relative to its cost. It expresses how much you gained (or lost) as a percentage of what you originally put in. ROI is one of the most widely used metrics in finance — from evaluating stock picks to assessing whether a business expansion paid off.
A positive ROI means the investment returned more than it cost. A negative ROI means you lost money. Because ROI doesn't account for time, longer investments with high ROI may actually be less efficient than shorter ones — which is why annualised ROI (also called CAGR) is the more useful figure when comparing investments of different lengths.
The ROI Formula — Explained
Annualised ROI = (Return ÷ Invested)^(1÷Years) − 1
Worked Example
You invest £10,000 in a stocks and shares ISA. Five years later your portfolio is worth £15,000.
Gain = £15,000 − £10,000 = £5,000
ROI = (£5,000 ÷ £10,000) × 100 = 50%
Annualised ROI = (15,000 ÷ 10,000)^(1÷5) − 1 = 8.45% per year
That 8.45% annual figure is what you should compare against other investments — not the headline 50%, which sounds impressive but took 5 years to achieve.
What Is a Good ROI?
UK Stocks (FTSE All-Share)
~7–8% annualised
Historical long-run average, before inflation
Global Equities (MSCI World)
~8–10% annualised
Historical average; past performance ≠ future results
UK Residential Property
~4–8% total return
Capital growth + rental yield combined
UK Savings Accounts
3–5% AER
As of 2026; risk-free but below long-run equity returns
Cash ISA
3.5–5% AER
Tax-free; compare AER not headline rate
UK Gilts (10yr)
~4% yield
Government bonds; low risk, fixed return
Sources: MoneyHelper, Vanguard UK, NerdWallet UK
ROI vs CAGR vs IRR — What's the Difference?
| Metric | What it measures | When to use it |
|---|---|---|
| ROI | Total percentage gain over the full investment period | Comparing total return on a single investment |
| CAGR / Annualised ROI | The smoothed annual growth rate over multiple years | Comparing investments of different durations |
| IRR | The discount rate that makes NPV of cash flows zero | Complex projects with multiple cash flows over time |
Frequently Asked Questions
What is a good ROI?
For UK equity investments, a long-run annualised ROI of 7–10% is generally considered good. UK savings accounts currently offer 3–5% AER. Anything above 10% per year consistently is exceptional — and often comes with higher risk.
What's the difference between ROI and profit?
Profit is the raw pound gain (Return − Cost). ROI expresses that profit as a percentage of the original investment, making it easier to compare two different-sized investments. A £500 profit on a £1,000 investment (50% ROI) is far more impressive than £500 profit on a £100,000 investment (0.5% ROI).
Why does annualised ROI matter?
A 50% total ROI over 5 years sounds great — but it works out to only 8.45% per year, which is roughly in line with the long-run FTSE return. Annualised ROI lets you compare investments of different lengths on equal footing.
Does ROI account for inflation?
No. A nominal ROI of 5% when inflation is 4% means your real return is closer to 1%. To get real ROI, subtract the inflation rate from your annualised ROI. For long-term planning, always consider both.
Is ROI the same as IRR?
No. ROI is a simple ratio (gain / cost). IRR (Internal Rate of Return) is a more complex measure used for projects with multiple cash flows over time — it finds the discount rate that makes the net present value of those cash flows zero. For simple buy/sell investments, ROI (or annualised ROI) is the right tool.
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Mandeep Singh · 25+ Years UK Financial Services
Important Information
This calculator is for informational purposes only and does not constitute financial advice, a personal recommendation, or an offer to buy or sell any investment or asset class.
Projected figures are illustrative estimates based solely on the inputs you provide. Returns are not guaranteed and actual outcomes will differ.
Past performance is not a guide to future performance, nor a reliable indicator of future results.
If you are unsure about the suitability of any investment or savings strategy for your circumstances, you should seek independent advice from a qualified financial adviser.