Universal Converter Pro

Return on Investment (ROI) Calculator

Calculate the Return on Investment (ROI) to evaluate the profitability of an investment. See your net profit and ROI percentage.

Related Finance & Investment Calculators

How to Use the ROI Calculator

  1. Initial Investment: Enter the total cost of the investment. This includes the purchase price plus any fees or commissions.
  2. Final Value: Enter the final value of the investment when it was sold or appraised.
  3. Calculate: See your net profit (or loss) and the total Return on Investment percentage.

Understanding the ROI Formula

The formula for ROI is simple and powerful:

ROI (%) = ( (Final Value - Initial Investment) / Initial Investment ) × 100

Frequently Asked Questions (FAQ)

What is a "good" ROI?

A "good" ROI is highly subjective and depends on the type of investment, its risk, and the time horizon. Generally, many investors aim for an annualized ROI that beats major market indexes, such as the S&P 500 (which has historically averaged around 10% annually).

Does ROI account for the investment duration?

No, the basic ROI formula does not account for the holding period. A 20% ROI over one year is much better than a 20% ROI over ten years. For comparing investments over different timeframes, it's better to calculate the "Annualized ROI".

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