Handeware
Business

Return on investment

40%
Net gain
$4,000.00
Return per year
11.9%

This is arithmetic for general information, not financial advice.

ROI Calculator

Return on investment, or ROI, shows how much you gained or lost compared with what you put in. This page gives the plain version, and a yearly version that spreads the gain across the years.

How it works

Simple ROI is the gain divided by the amount you put in, times 100. The gain is what came back minus what went in.

The yearly figure assumes the same growth each year. It is the years-th root of the total growth, minus one, times 100. It helps compare a short project with a longer one.

Worked example

Putting in $10,000.00 and getting back $14,000.00 gives a gain of $4,000.00, a simple return of 40% over 3 years, or 11.9% a year.

Questions

Does ROI include fees and taxes?

Only if you include them. Put the true cost in the first box, and the amount you really kept in the second.

Why is the yearly number smaller?

Because the gain is spread over several years. A large simple return over a long time can be a modest return per year.

Does a high ROI settle the question?

Not on its own. ROI does not show risk, timing or how much cash you need up front.

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