ROI Calculator

Return on investment (ROI) measures how much money you made (or lost) on an investment relative to the amount invested. It's expressed as a percentage and is the most widely-used single metric for comparing investments.

Simple ROI formula

Take the gain (or loss) divided by the original investment, expressed as a percentage:

ROI = (Final value − Initial investment) ÷ Initial investment × 100

Annualised ROI (CAGR)

Simple ROI doesn't account for time. A 50% return over 1 year is better than 50% over 10 years. CAGR (Compound Annual Growth Rate) is the rate that, compounded annually, gets you from the initial investment to the final value:

CAGR = (Final ÷ Initial)^(1/years) − 1

Worked example

Invest 10,000 SAR; the investment is worth 15,000 SAR after 5 years.

1. Gain = 15,000 − 10,000 = 5,000 SAR
2. Simple ROI = 5,000 / 10,000 × 100 = 50%
3. Multiple = 15,000 / 10,000 = 1.5×
4. CAGR = (1.5)^(1/5) − 1 ≈ 8.45% per year

Comparing investments

• Always compare CAGR (annualised) rather than simple ROI when durations differ.
• ROI doesn't account for risk — a 30% return on a risky asset isn't equivalent to 30% on a safe one.
• For partial-year holdings, CAGR still applies — use the year as a fractional duration.
• Negative ROI means you lost money; -100% means the investment was a total write-off.