What the calculation measures
Simple ROI is useful for a quick comparison, while annualized return is more meaningful when holding periods differ.
How to interpret the result
Use cash-flow-aware metrics such as IRR when investments have multiple contributions or withdrawals.
Run scenarios instead of one answer
Change the most uncertain input and compare outcomes. A calculator is most useful when it shows sensitivity, not when one estimate is treated as a guarantee.
Limits and assumptions
Fees, taxes and timing can materially change realized returns.