Calculate the return on investment for any financial decision.
Rate of Return (ROI)
50%
Annualized ROI Rate
14.47%
Net Capital Gains
$5,000.00
Basic ROI is calculated as: ROI = (Net Profit / Initial Investment) * 100. To account for time, Annualized ROI is computed using the formula: Annualized ROI = [(Final Value / Initial Investment)^(1/t) - 1] * 100, where t is the term in years.
1. Enter the Initial Capital Investment (starting cost). 2. Input the Final Investment Value (or current worth). 3. Input the investment term in years. 4. Review the basic ROI, annualized return rate, and net capital gain.
Net Capital Gains is the absolute profit made. Basic ROI represents the total raw percentage gain. Annualized ROI shows the geometric average annual return rate, allowing you to compare investments of different durations.
FAQ
Basic ROI doesn't consider how long it took to earn a profit. A 50% ROI earned over 1 year is much better than a 50% ROI earned over 10 years. Annualized ROI normalizes the return to a yearly rate, allowing accurate comparisons.
Yes. If the final value of your investment is less than the initial cost, your net profit will be negative, resulting in a negative ROI (indicating a financial loss).
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