0.25 Interest Rate Reduction Calculator

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Investment Return on Investment (ROI) Calculator

Results:

Total Profit/Loss: $0.00

ROI Percentage: 0.00%

Annualized ROI: 0.00%

Understanding Investment ROI

Return on Investment (ROI) is a fundamental performance metric used to evaluate the efficiency or profitability of an investment. It is expressed as a percentage and represents the net profit or loss generated from an investment relative to its initial cost. Essentially, ROI tells you how much money you made (or lost) for every dollar you invested.

The basic formula for ROI is:
ROI = ( (Current Value – Initial Investment) / Initial Investment ) * 100
In this calculator, we also provide the Total Profit/Loss, which is simply the Current Value – Initial Investment.

Furthermore, we calculate the Annualized ROI. This is crucial for comparing investments that have different holding periods. It standardizes the return to an annual basis, allowing for a more accurate comparison. The formula for Annualized ROI is:
Annualized ROI = ( (1 + ROI)^ (1 / Time Period) – 1 ) * 100
Where 'ROI' is the decimal form of the overall ROI (e.g., 0.20 for 20%).

Example: Imagine you invested $10,000 in stocks (Initial Investment). After 3 years (Time Period), your investment is now worth $15,000 (Current Value).

  • Total Profit/Loss: $15,000 – $10,000 = $5,000
  • ROI Percentage: (($15,000 – $10,000) / $10,000) * 100 = 50%
  • Annualized ROI: ((1 + 0.50)^(1 / 3) – 1) * 100 ≈ 14.47%

This means your investment generated a total profit of $5,000, a 50% return over three years, and an average annualized return of approximately 14.47%.

function calculateROI() { var initialInvestment = parseFloat(document.getElementById("initialInvestment").value); var currentValue = parseFloat(document.getElementById("currentValue").value); var timePeriod = parseFloat(document.getElementById("timePeriod").value); var totalProfitLossElement = document.getElementById("totalProfitLoss"); var roiPercentageElement = document.getElementById("roiPercentage"); var annualizedROIElement = document.getElementById("annualizedROI"); if (isNaN(initialInvestment) || isNaN(currentValue) || isNaN(timePeriod) || initialInvestment <= 0 || timePeriod 0) { annualizedROI = (Math.pow((1 + (totalProfitLoss / initialInvestment)), (1 / timePeriod)) – 1) * 100; } totalProfitLossElement.textContent = "$" + totalProfitLoss.toFixed(2); roiPercentageElement.textContent = roiPercentage.toFixed(2) + "%"; annualizedROIElement.textContent = annualizedROI.toFixed(2) + "%"; }

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