Formula
Return on investment compares the change in value with the original amount:
ROI = (amount returned − amount invested) / amount invested
The result is shown as a percent. A returned amount below the investment is a negative ROI.
Assumptions
- The invested amount is the full cost basis.
- No extra contributions or partial withdrawals are modeled.
- Taxes and fees are included only if you already subtracted them from the returned amount.
Worked example
Investing $10,000.00 and getting back $15,000.00 is a 50.00% return, a gain of $5,000.00.
Input definitions
- Amount invested
- The money put in, used as the denominator.
- Amount returned
- The value you received or could receive, including the original money.
Limitations
ROI here ignores how long the investment was held, so a 50% gain in one year is shown the same as a 50% gain in ten years.
Questions
Does this annualize the return?
No. It is the total percent change, not a yearly rate.
What if I lost money?
Enter the lower amount you got back. The percent is negative and the gain shows as a loss.