ROI Calculator
Calculates return on investment as a percentage from initial cost and final return
Return on investment as a percentage
Final value minus initial investment
Frequently Asked Questions
How do I calculate ROI?
ROI = (Net Profit / Initial Investment) x 100. If you invested $10,000 and received $13,000 back, your net profit is $3,000 and your ROI is 30%. A positive ROI means you made money; negative means you lost money.
What is a good ROI?
It depends on the investment type and risk. Stock market averages about 10% annually. Real estate typically targets 8-12%. Business investments should exceed your cost of capital. Higher-risk investments should demand higher ROI to compensate.
What are the limitations of ROI?
ROI does not account for time. A 50% ROI over 5 years is less impressive than 50% over 1 year. It also ignores risk and opportunity cost. Use it alongside other metrics like IRR and payback period for a complete picture.
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