You can use the below return on investment calculator to determine your gain or loss on an investment. The calculator provides the overall ROI, and an annualized return on investment. This return on investment calculator requires three pieces of information, beginning value of investment, ending value of investment and income received from investment.
Below is the example how Return on Investment (ROI) Calculator Woks:
Beginning Value of Investment: $1000
Ending Value of Investment: $0
Income Received From Investment: $1200
The overall return on your investment has been 20.00%
Definition Of Return On Investment – ROI
A performance measure used to evaluate the effectiveness of an investment or to compare the efficacy of a number of different investments. ROI measures the amount of return on investment compared to the cost of the investment. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment, and the result is expressed as a percentage or a ratio.
The return on investment is the formula used freely in finance and investment. It can be applied to all forms of investment, including projects within a company, a company as a whole, a personal investment by an individual, and investment in a valuable asset.
Return on Investment (ROI) Formula
ROI = (Net Profit / Cost of Investment) x 100
For example, an investor buys $1,000 worth of stocks and sold shares two years later for $1,300. The net profit of the investment would be $300 and the ROI is calculated as follows:
ROI = (300/1000) x 100 = 30%
The return on investment in the above example would be 30%. The calculation may be amended by deducting taxes and fees to obtain a more accurate picture of the total ROI.
The same calculation can be used to calculate an investment made by a company. However, the calculation is more complex because there are several entries. For example, to determine the net profit of an investment, a company would need to know exactly how much money went into the project and the time spent by employees working on it.