ROI Calculator
Calculate return on investment
The Complete Guide to ROI Calculation
Introduction to ROI
Our ROI Calculator is designed to help you assess the performance of your investments. By simply entering your initial investment, final value, and the investment period, you can quickly determine:
- Total ROI as a percentage
- Annualized ROI that reflects compound growth over time
- Total Return, indicating your net profit or loss
ROI = ((Final Value - Initial Investment) / Initial Investment) × 100
What is ROI?
Return on Investment (ROI) is a key financial metric used to evaluate the profitability of an investment. It indicates the percentage gain or loss relative to the initial investment, making it easier to compare the performance of different investments.
ROI = ((Final Value - Initial Investment) / Initial Investment) × 100
How do we calculate ROI?
To calculate ROI, subtract your initial investment from the final value to determine the net gain or loss. Then, divide that result by the initial investment and multiply by 100 to convert it to a percentage.
ROI = ((Final Value - Initial Investment) / Initial Investment) × 100
How is Annual ROI determined?
Annual ROI provides an annualized perspective on your investment returns by taking the total ROI and factoring in the investment period. This allows you to compare returns on investments held for different lengths of time.
Annual ROI = ((Final Value / Initial Investment)1 / Time Period - 1) × 100
Understanding Total Return
Total Return is the absolute gain or loss on your investment. It is calculated by subtracting the initial investment from the final value, giving you a clear picture of your net profit or loss.
Total Return = Final Value - Initial Investment
ROI Calculation Guide
Key Points:
- • ROI measures the profitability and efficiency of your investment
- • Annual ROI reflects compound growth and enables period comparisons
- • A positive ROI indicates profit, while a negative ROI signals a loss
- • Use the calculator to quickly derive these insights and make informed decisions
ROI Calculator FAQs
What is Return on Investment (ROI)?
ROI is a metric used to assess the profitability of an investment by comparing the net gain or loss to the initial investment cost.
How is Annual ROI calculated?
Annual ROI is derived by annualizing the total ROI, taking into account the time period of the investment to reflect compound growth.
What does Total Return indicate?
Total Return shows the absolute difference between the final value and the initial investment, providing a clear measure of profit or loss.