What is ROI Calculator?
An ROI Investment Calculator helps investors measure the profitability of investments by comparing returns to costs. This essential financial tool calculates percentage returns, enabling quick comparison between different investment opportunities. Perfect for real estate analysis, stock market investments, and business project evaluations.
Calculate Your ROI
ROI Formula
ROI = [(Final Value - Initial Investment) / Initial Investment] × 100
How to Use
Enter initial investment amount, final value received, and investment duration. Our smart calculator instantly computes annualized ROI percentage. Compare multiple investments by saving results. Suitable for stock returns, business projects, and property investments.
ROI Calculation Table
| Initial Investment | Final Value | Duration | ROI |
|---|---|---|---|
| $10,000 | $15,000 | 3 years | 50% |
| $25,000 | $35,000 | 5 years | 40% |
| $50,000 | $75,000 | 2 years | 50% |
Advantages & Disadvantages
Advantages:
- Quick financial performance assessment
- Standardized comparison metric
- Simple calculation method
- Identifies profitable investments
- Helps in portfolio optimization
Disadvantages:
- Ignores time value of money
- Doesn't consider risk factors
- Oversimplifies complex investments
- No cash flow timing consideration
- Limited for long-term projections
FAQs
1. What is a good ROI percentage?
A good ROI typically exceeds 10% annually, but varies by industry. Real estate often aims for 8-12%, while stocks average 7-10% long-term.
2. Can ROI be negative?
Yes, negative ROI indicates loss. If final value is less than initial investment, the percentage return shows negative value.
3. How accurate are ROI calculators?
Basic ROI calculators provide directional estimates but don't account for taxes, fees, or inflation. Use as preliminary analysis tool.