Understanding the roi calculator
Return on investment is the simplest performance measure: profit divided by cost. Its weakness is that it ignores time a 50% gain is spectacular in one year and mediocre over fifteen. The annualized figure fixes that by asking what constant yearly rate would compound to the same result, making investments of different lengths directly comparable.
For honest comparisons, include every cost in the invested amount (fees, commissions, taxes where relevant) and every benefit in the returned amount (dividends and interest, not just the sale price). Leaving out costs is the most common way ROI figures flatter an investment.
Results are estimates for education only and are not financial advice.