Return on Investment Calculator

What is ROI (Return on Investment)?

ROI, or Return on Investment, is a financial metric used to evaluate the profitability of an investment relative to its cost. It is a ratio between the net profit and the initial investment cost. ROI is commonly expressed as a percentage, making it easier to interpret and compare different investment opportunities.

Formula for Calculating ROI:

The formula to calculate ROI is straightforward:

• Returned Amount: The total amount gained from the investment, including profits, dividends, or any other earnings.
• Invested Amount: The initial amount of capital invested in the project or venture.

How to Use the ROI Calculator:

• Enter Invested Amount: Input the initial amount of money invested in the project or venture into the designated field. This could be the cost of purchasing stocks, real estate, equipment, etc.
• Enter Returned Amount: Input the total amount gained from the investment, including any profits, dividends, or earnings generated.
• Press Calculate Button: Once you've entered both the invested and returned amounts, click on the "Calculate" button. The calculator will process the data and generate the ROI percentage.
• Interpreting Results: The calculator will display the ROI percentage, indicating the profitability of the investment. A positive ROI indicates a profitable investment, while a negative ROI suggests a loss. The higher the ROI percentage, the more lucrative the investment.
• Decision Making: Use the calculated ROI to assess the performance of your investment and make informed decisions about future investments. Comparing ROI values from different investments can help prioritize opportunities and optimize your portfolio.

Example:
Let's say you invested $10,000 in stocks and received $12,500 after selling them. To calculate the ROI:

In this scenario, the ROI is 25%, indicating a 25% return on the initial investment of $10,000.

Conclusion:

The ROI calculator simplifies the process of evaluating investment performance by providing a clear percentage representation of profitability. By understanding and utilizing this tool, investors can make informed decisions to maximize returns and achieve their financial goals.