Return on investment (ROI) calculator

ROI answers a simple question: how much did this investment earn relative to what it cost? Annualizing it lets you compare investments held for different lengths of time. IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5.

ROI calculator

Amount invested ($)
Value now or when sold ($)
Income received along the way – interest, dividends ($)
Years held
Tax on gain and income (%, combined)

The formulas

ROI = (ending value + income received − amount invested) ÷ amount invested. Annualized return = (1 + ROI)^(1 ÷ years) − 1. A 30% ROI over 4 years is about 6.8% a year, which is the number to compare with a yield.

Example

	Investment A	Investment B
Invested	$10,000	$10,000
Gain incl. income	$3,000	$2,000
Years	5	2
ROI	30%	20%
Annualized	≈5.4%	≈9.5%

Illustrative arithmetic only. B has the lower ROI but the higher yearly rate.

ROI pitfalls

Leaving out income received (understates ROI).
Leaving out fees and taxes (overstates it).
Comparing ROI over different periods without annualizing.
Ignoring risk – a higher ROI may have come with large swings.

Improve the ROI on idle money

For cash you won't need soon, the quickest ROI improvement is often a higher after-tax yield at similar risk. IncomeGrid ranks every item by yield after tax for where you live: after federal, state and each investment type tax (Treasuries, municipal bonds, corporate bonds, funds, REITs and filed offerings are each taxed differently).

ROI for income investments

For bonds and other income investments, much of the return is the income itself. Holding a bond to maturity, the ROI is roughly the yield to maturity per year; selling early adds a gain or loss depending on how rates moved. For dividend stocks, ROI combines dividends and price change. Including income is what separates a true ROI from a simple price change.

ROI vs IRR

ROI treats the investment as one sum in and one out. If you added or withdrew money along the way, an internal rate of return (IRR) or money-weighted return is more accurate. For a single lump sum, annualized ROI and IRR are the same.

How IncomeGrid helps you earn more

IncomeGrid helps you discover higher-yield income opportunities you may not have looked at, so you can earn more on the same money. It has 40,000+ investment options screened, each with its yield, after-tax yield and a risk level from 1 to 5. Choose where you live and every yield is shown after federal, state and each investment type tax, so you can see which options pay you more.

Find a higher yield → or browse example income portfolios

Frequently asked questions

How do you calculate return on investment?

Subtract what you invested from what you got back (value plus income), then divide by what you invested.

What is a good ROI?

Compare the annualized ROI with a low-risk benchmark such as a Treasury of similar term.

Is ROI the same as yield?

No. Yield is income only; ROI includes price change.

Not investment advice. General information only; yields change, check the source before acting.