ROI Calculator: Formula, Example and What the Result Means
Calculates total and annualised return on investment. This guide walks through what each input means, the formula behind the answer and a worked example using typical Australian figures. You can follow along in the free ROI Calculator.
Why it matters
Australians save and invest through bank accounts, term deposits, shares, ETFs and property. Interest and dividends are taxable, franking credits can offset tax on dividends, and inflation steadily reduces the value of money that isn’t growing.
What you need to enter
The calculator asks for 3 inputs. The table shows each one with the example value used later in this guide.
| Input | Example value |
|---|---|
| Amount invested ($) | 10000 |
| Final value ($) | 13500 |
| Years held | 3 |
The formula
ROI = (final − invested) ÷ invested. Annualised = (final ÷ invested)^(1 ÷ years) − 1.
Worked example
Entering the example values above gives these results:
| Result | Value |
|---|---|
| Total ROI | 35% |
| Annualised return | 10.52% |
| Gain | $3,500.00 |
The headline figure is 35% (total ROI). Change any input in the calculator and every result updates instantly, so you can test different scenarios side by side.
How the total ROI changes with amount invested
The table below keeps every other input at the example value and moves only “Amount invested ($)” up and down by 10% and 20%. It shows how sensitive the total ROI is to that one figure.
| Amount invested ($) | Total ROI |
|---|---|
| 8,000 | 68.75% |
| 9,000 | 50% |
| 10,000 | 35% |
| 11,000 | 22.73% |
| 12,000 | 12.5% |
At 8,000 the result is 68.75%; at 12,000 it is 12.5%. If a small change in this input moves the answer a lot, it is worth double-checking that figure before you rely on the result.
A practical tip
Always compare annualised returns. A 35% gain over three years is about 10.5% a year.
Keep going
Before relying on the number, read ROI: What to Check Before You Trust the Number. You might also find these guides useful:
- Using a CAGR Calculator in Australia: A Step-by-Step Guide
- Emergency Fund Calculator Explained for Australians
- How the Effective Annual Rate Calculator Works (With a Worked Example)
Frequently asked questions
- Are investment returns guaranteed?
- Only some products, such as term deposits, have fixed rates. Share and fund returns vary and can be negative.
- Is my bank deposit protected?
- The Financial Claims Scheme guarantees deposits up to $250,000 per account holder per authorised bank.
- Is this investment advice?
- No. The calculators provide general information only.
Run your own numbers in the ROI Calculator.
Open the calculatorGeneral information only. Rates and thresholds change, usually on 1 July. Confirm current figures with the ATO or the relevant authority, and get personal advice for decisions about your situation.