ROI Explained: How to Measure Whether an Investment Paid Off
Return on investment gives you one simple percentage for judging an investment. Here is how to calculate it and what it does not tell you.
What is the ROI Calculator?
This calculator compares what you get back from an investment with what you paid for it. Return on investment, or ROI, equals the final value minus the cost, divided by the cost, times 100. A positive result means a gain, a negative result means a loss, and the gain itself is simply the final value minus the cost.
How to use it
- Enter the total cost of the investment.
- Enter the final value you received or expect to receive.
- Press Calculate to see the gain and the ROI percentage.
Worked example
Buy for 10,000 and sell for 15,000. The tool gives a gain of 5,000 and an ROI of 50%.
How do you calculate ROI?
Subtract the cost from the final value to find the gain, then divide that gain by the cost and multiply by 100. The result is the return as a percentage of what you put in. Remember that ROI on its own ignores time, so compare investments over similar periods where possible.
Frequently asked questions
What is a good ROI?
There is no single good number, because it depends on the risk and the time involved. A 50% gain over ten years is very different from 50% in one year, so always consider the time period too.
Does ROI include costs like fees?
Only if you include them in the cost you enter. For a fair result, add purchase costs, fees and any other expenses to the cost figure.