About this calculator
Return on investment (ROI) tells you how much you gained or lost compared with what you put in. Invest £1,000, end up with £1,500, and your ROI is 50%.
Add the number of years to see the average return per year, which is the fairer way to compare investments that ran for different lengths of time.
Worked examples
Real numbers, worked out by the same calculator. Press “Use these numbers” to try one above.
£1,000 grows to £1,500 over 3 years
- Return on investment
- 50%
- Average return per year
- 14.47%
- Profit
- £500.00
- Money multiple
- 1.5×
Investing £1,000.00 and ending with £1,500.00 is a gain of £500.00, a return of 50%. Over 3 years that averages 14.47% a year, compounded.
£5,000 falls to £4,200
- Return on investment
- -16%
- Loss
- -£800.00
- Money multiple
- 0.84×
Investing £5,000.00 and ending with £4,200.00 is a loss of £800.00, a return of -16%.
£20,000 becomes £26,000 in 2 years
- Return on investment
- 30%
- Average return per year
- 14.02%
- Profit
- £6,000.00
- Money multiple
- 1.3×
Investing £20,000.00 and ending with £26,000.00 is a gain of £6,000.00, a return of 30%. Over 2 years that averages 14.02% a year, compounded.
The formulas
ROI = (final value − amount invested) ÷ amount invested × 100. £1,000 growing to £1,500 is 500 ÷ 1,000 = 50%.
Average return per year (also called the compound annual growth rate) = (final ÷ invested)1 ÷ years − 1. For £1,000 → £1,500 over 3 years: 1.5⅓ − 1 = 14.47% a year.
The yearly figure is not 50% ÷ 3 = 16.67%. Gains compound, so a slightly lower steady yearly rate produces the full 50% over three years.
Getting a meaningful ROI
- Count every cost. Fees, your own time if you'd otherwise be paid for it, and running costs all reduce the return.
- Include income received along the way, such as rent or dividends, in the amount you ended up with.
- Compare like with like. A 30% return over six years is weaker than 20% over one year. Use the yearly figure to compare.
- Remember inflation and tax. This calculator shows the raw figure before both.
What ROI can't tell you
ROI says nothing about risk. A steady 6% and a lucky 6% look identical here. It also can't predict what an investment will return in future, so treat it as a way of measuring what has happened or testing a what-if, not as advice about what to buy.
Frequently asked questions
How do I calculate ROI?
Subtract what you invested from what you ended up with, divide by what you invested, and multiply by 100. £1,000 growing to £1,500 is a 50% return.
What's the difference between ROI and annual return?
ROI is the total return over the whole period. The annual return spreads it over the years held, allowing for compounding, so different investments can be compared fairly.
Can ROI be negative?
Yes. If you end up with less than you invested, the ROI is negative. £5,000 falling to £4,200 is a −16% return.
What is a good ROI?
It depends on the risk, the time frame and what else you could have done with the money. Compare the yearly figure with realistic alternatives, not with a fixed number.
Does this include tax and inflation?
No. It shows the raw return before tax and before adjusting for rising prices.
Formulas tested against hand-worked answers. Last reviewed 29 September 2026. These calculators do arithmetic only; they are not financial, tax or legal advice.