ROI Calculator

ROI Calculator

Return on Investment (ROI) measures how much profit is earned relative to the cost of an investment.

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ROI is calculated by subtracting the investment cost from the gains and dividing by the investment cost. For example, if you invest $50,000 and end up with $70,000, your ROI is 40%.

This metric is simple and widely used, but it can vary based on how costs and gains are defined. Including or excluding taxes, fees, and other expenses changes ROI calculations.

Unlike rate of return (ROR), ROI doesn’t consider time, so comparing investments requires additional calculations like annualized ROI.

ROI offers a quick snapshot, but thorough investment analysis usually involves more detailed methods to account for risk and time value.