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ROI Calculator

Use this free ROI Calculator to quickly measure the profitability of your investments. Simple, accurate, and easy to use for business decisions.

The ROI Calculator calculates Return on Investment, the ultimate measure of efficiency. It compares your Net Profit to your Total Cost.

Formula: (Returned Value - Invested Amount) / Invested Amount * 100.

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years

When to Use This Calculator

Use to compare efficiencies: "Is it better to make $200 on a $1,000 investment (20%) or $500 on a $5,000 investment (10%)?"

Example Scenario

Invested: $5,000.
Returned: $7,500.
Time: 3 Years.

Profit: $2,500.
Total ROI: 50%.
Annualized ROI: ~14.5% (The yearly growth rate needed to reach that return).

Formula & Calculation Method

Formula Used

Result = f(Inputs)

Variable Explanation

  • Inputs: User provided values
  • Result: Calculated output

Step-by-Step Calculation

  1. 1. Process user inputs.
  2. 2. Apply standard financial formulas specific to this calculator type.
  3. 3. Display result.

Interpretation Notes

Refer to specific financial literature for the exact derivation of this specific calculator.

How to Interpret the Results

Annualized ROI: This is crucial. A 50% return is great, but if it took 10 years, that's only ~4% per year (less than the stock market). Always look at the Annualized number.

Common Mistakes

Ignoring Time: High ROI over a long time might be worse than moderate ROI over a short time.