ROI: What to Check Before You Trust the Number

Updated 14 August 2026 · Savings and investing

A ROI Calculator gives a fast answer, but the answer is only as good as what goes in. These are the mistakes we see most often with ROI calculations in Australia, and how to avoid them.

1. Ignoring inflation

A return below inflation means your money buys less over time.

2. Comparing total rather than annual returns

Always convert returns to a yearly rate before comparing investments held for different periods.

3. Chasing bonus rates without meeting conditions

Missing a deposit or making a withdrawal can drop a bonus saver to its low base rate.

4. Forgetting tax on returns

Interest is taxed at your marginal rate, so a 5% account may return closer to 3.4% after tax.

5. Overlooking the detail that matters most here

Always compare annualised returns. A 35% gain over three years is about 10.5% a year.

How the total ROI changes with final value

A common mistake is getting one input slightly wrong. Here is what happens to the total ROI when “Final value ($)” is off by up to 20% in either direction, with everything else held steady.

Final value ($)	Total ROI
10,800	8%
12,200	22%
13,500	35%
14,900	49%
16,200	62%

At 10,800 the result is 8%; at 16,200 it is 62%. 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 quick sense check

ROI = (final − invested) ÷ invested. Annualised = (final ÷ invested)^(1 ÷ years) − 1. With typical inputs the calculator returns total ROI of 35%. If your own result looks wildly different, check that each figure is in the right unit and period (weekly, monthly or yearly) before drawing conclusions.