Business Technology
ROI Calculator
An ROI calculator measures return on investment by dividing net gain by the amount invested. This tool handles a single investment with an optional holding period. It also covers a technology project with one-time costs, monthly costs, and monthly benefits. It returns ROI, annualized ROI, payback period, and a sensitivity range.
Reviewed October 2026
Calculator
Results
Start typing and results appear here instantly, with the formula behind each one. Or load the example.
Calculations run in your browser. Nothing you enter is sent to Stack Row.
How to Use the ROI Calculator
Choose a tab, enter your figures, and select Calculate.
- Simple ROI needs the amount invested and the final value. Add a holding period in years to see annualized ROI.
- Technology Project separates one-time costs, such as implementation and training, from monthly licensing and operating costs. Benefits can be added revenue, direct savings, or staff hours saved at a loaded hourly cost.
The sensitivity range recalculates ROI with benefits lower and higher by the percentage you choose. Load example fills in a software rollout over 36 months.
ROI Formulas
| Result | Formula |
|---|---|
| ROI | (Final value - amount invested) ÷ amount invested × 100 |
| Annualized ROI | ((Final value ÷ amount invested) to the power of 1 ÷ years - 1) × 100 |
| Project ROI | (Total benefits - total costs) ÷ total costs × 100 |
| Payback period | One-time costs ÷ (monthly benefit - monthly cost) |
| Labor savings | Hours saved × loaded cost per hour |
Corporate Finance Institute's ROI formula uses the same gain-over-cost definition. Its payback period page explains the even-cash-flow method used here. Annualized ROI follows the compound annual growth rate formula.
Why Annualized ROI Matters
Plain ROI ignores time. A 30% return over two years and a 30% return over five years look identical, even though the first is far better. Annualized ROI converts any period into an equivalent yearly rate so you can compare options of different lengths.
In the Technology Project tab, annualized ROI compounds the period's total ROI over the number of months. It is a comparison figure, not a discounted cash flow, so it does not apply a cost of capital.
Worked Examples
A simple investment of $10,000 grows to $13,000 over two years. Net gain is $3,000, so ROI is 30%. Annualized ROI is the square root of 1.3, minus one, or about 14.02% per year.
A software rollout costs $25,000 to implement and $5,000 for training. Licensing is $2,000 a month, with $500 of other monthly operating cost. The software adds $1,500 a month in savings and frees 120 staff hours, valued at $45 an hour.
Monthly benefit is $1,500 + 120 × $45 = $6,900, and monthly cost is $2,500. Over 36 months, total benefits are $248,400 and total costs are $120,000. Net value is $128,400, so ROI is 107%. The project pays back its $30,000 of one-time costs in about 6.8 months, and annualized ROI is about 27.4%.
Building a Credible Technology Business Case
Hours saved are only a benefit when the time goes to other valuable work or reduces hiring. Use a loaded hourly cost that includes benefits and payroll taxes, and be conservative about adoption in the first months.
Include every recurring cost, including support, integrations, and admin time, so ROI is not overstated. Systems that touch many teams, such as an ERP system, usually carry larger implementation and training costs than a single-team tool. Comparing platforms like HubSpot and Salesforce is easier when each option runs through the same ROI model.
Methodology and Limitations
- ROI uses nominal values and does not discount future cash flows.
- The project model assumes costs and benefits stay level each month after launch.
- Payback assumes one-time costs are paid at the start and are recovered from monthly net benefit.
- Taxes, depreciation, financing costs, and inflation are not included.
- The sensitivity range adjusts revenue, savings, and hourly value together.
- Inputs stay in your browser. A calculation is saved locally after you select Calculate.
Frequently Asked Questions
What Is the Formula for ROI?
ROI equals net gain divided by the amount invested, multiplied by 100. An investment of $10,000 that returns $13,000 has an ROI of 30%.
What Is a Good ROI?
It depends on risk, time, and alternatives. Compare annualized ROI with what the same money could earn elsewhere, such as the company's cost of capital or a target hurdle rate.
How Is Annualized ROI Different From ROI?
ROI measures the total return over the whole period. Annualized ROI converts that total into an equivalent yearly rate, which makes investments of different lengths comparable.
How Do I Calculate the Payback Period?
Divide the one-time investment by the net benefit per period. A $30,000 project that adds $4,400 of net benefit a month pays back in about 6.8 months.
Should Staff Time Savings Count Toward ROI?
Count them when the saved time goes to other valuable work or reduces hiring or overtime. Value them at a loaded hourly cost, and avoid counting the same hour twice.
Can ROI Be Negative?
Yes. ROI is negative when total costs exceed total benefits during the period. A project with a long payback can show negative ROI over a short period and positive ROI over a longer one.