ROI Formula Explained with Example
ROI, or return on investment, measures how profitable an investment is compared to its original cost.
The formula
ROI = (Profit / Investment) × 100
What each part means
- Profit = Final Value − Initial Investment
- Investment = Original amount invested
Example
If you invest $10,000 and your final value becomes $12,000, your profit is $2,000. ROI = ($2,000 / $10,000) × 100 = 20%.
Use the calculator
Use the ROI calculator to test different investment scenarios and compare returns quickly.
Open ROI Calculator