Apr Interest Rate Calculator

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ROI Calculator for Stock Investments

function calculateROI() { var initialInvestment = parseFloat(document.getElementById("initialInvestment").value); var finalValue = parseFloat(document.getElementById("finalValue").value); var timePeriodDays = parseFloat(document.getElementById("timePeriodDays").value); var resultDiv = document.getElementById("result"); resultDiv.innerHTML = "; // Clear previous results if (isNaN(initialInvestment) || initialInvestment <= 0) { resultDiv.innerHTML = 'Please enter a valid positive initial investment.'; return; } if (isNaN(finalValue) || finalValue < 0) { resultDiv.innerHTML = 'Please enter a valid non-negative final value.'; return; } if (isNaN(timePeriodDays) || timePeriodDays <= 0) { resultDiv.innerHTML = 'Please enter a valid positive time period in days.'; return; } var profit = finalValue – initialInvestment; var roiPercentage = (profit / initialInvestment) * 100; var annualizedROI = ((Math.pow((finalValue / initialInvestment), (365 / timePeriodDays))) – 1) * 100; var resultHTML = '

Results:

'; resultHTML += 'Profit/Loss: $' + profit.toFixed(2) + "; resultHTML += 'Return on Investment (ROI): ' + roiPercentage.toFixed(2) + '%'; resultHTML += 'Annualized ROI: ' + annualizedROI.toFixed(2) + '%'; resultDiv.innerHTML = resultHTML; }

Understanding the Return on Investment (ROI) for your stock market endeavors is crucial for assessing the profitability of your investments. This calculator helps you determine how effectively your money has been put to work.

Initial Investment: This is the total amount of money you initially put into buying a stock or a portfolio of stocks. It includes the purchase price of the shares and any associated brokerage fees or commissions at the time of purchase.

Final Value: This represents the current market value of your stock investment. If you have sold the stocks, it's the total proceeds from the sale. If you still hold the stocks, it's the market price multiplied by the number of shares you own, minus any selling fees you would incur.

Time Period (Days): This is the duration, measured in days, for which you held the investment from the purchase date to the sale date or the current date. Accurately stating this period is vital for calculating annualized returns.

Profit/Loss: This is the straightforward difference between your Final Value and your Initial Investment. A positive number indicates a profit, while a negative number signifies a loss.

Return on Investment (ROI): This metric expresses your profit or loss as a percentage of your initial investment. A higher positive ROI indicates a more profitable investment. The formula is:

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

Annualized ROI: This calculation standardizes the ROI over a one-year period, allowing you to compare investments with different holding periods. It shows what the investment would have returned if it had consistently performed at the same rate over a full year. The formula used is a compound annual growth rate (CAGR) approximation:

Annualized ROI (%) = ((Final Value / Initial Investment)^(365 / Time Period in Days)) - 1) * 100

Example:

Let's say you invested $5,000 in a stock (Initial Investment).

After holding it for 500 days (Time Period), the stock's value has grown to $7,500 (Final Value).

Using the calculator:

  • Profit/Loss: $7,500 – $5,000 = $2,500
  • ROI: (($7,500 – $5,000) / $5,000) * 100 = (2500 / 5000) * 100 = 50.00%
  • Annualized ROI: ((($7,500 / $5,000)^(365 / 500)) – 1) * 100 = ((1.5^0.73) – 1) * 100 ≈ (1.337 – 1) * 100 ≈ 33.70%

This means your investment yielded a 50% return over 500 days, which is equivalent to an annualized return of approximately 33.70% per year.

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