Investment Return Calculator
Understand the potential profitability of your investments with our easy-to-use Investment Return Calculator. This tool helps you estimate the gain or loss on an investment over a specific period, allowing for better financial planning and decision-making.
What is Return on Investment (ROI)?
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, in relation to the investment's cost. To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment.
The formula for ROI is:
ROI = ((Current Value – Initial Investment) / Initial Investment) * 100
A positive ROI indicates that the investment has generated a profit, while a negative ROI means the investment has resulted in a loss. The result is typically expressed as a percentage.
How to Use This Calculator:
- Initial Investment: Enter the total amount of money you initially put into the investment.
- Current Value: Enter the current market value of your investment.
- Investment Duration: Enter the number of years you have held the investment.
- Click "Calculate Return" to see your estimated ROI.
Example Calculation:
Suppose you invested $5,000 in stocks three years ago, and today the value of those stocks is $7,500. Using our calculator:
- Initial Investment: $5,000
- Current Value: $7,500
- Investment Duration: 3 Years
Calculation: ((7500 – 5000) / 5000) * 100 = (2500 / 5000) * 100 = 0.5 * 100 = 50%
This means your investment has yielded a 50% return over the three-year period.