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2. Time Value of Money (TVM)
Future Value= Present Value x (1+R)N
Time Value of Money (TVM):
Future Value= Present Value x (1+R)N Learn more about Time Value of Money
Formula to Calculate Return on Investments
ROI is always denoted as a percentage
Formula to Calculate Return on Investments
ROI can be positive, negative, or zero ROI is always denoted as a percentage
1. Pay-Back Period
The lower is the payback period, the better is the investment. It is calculated in years.
PayBack Period:
The lower the payback period, the better the investment.
What is ROI and How to Calculate Investment Returns?
ROI shows how much profit or loss an investment generates relative to its cost, helping compare performance across different investment options. July 29, 2026 7 minutes read
Key Takeaways
ROI helps measure how much profit you earn relative to your initial investment. You can use ROI to compare different investment options over the same time frame.
Formula to Calculate Return on Investments
Return on Investment compares the incomes received from the investment with the cost of the investment. Below is the formula for ROI: ROI can be positive, negative, or zero
Formula to Calculate Return on Investments
Return on Investment helps you compare the income received from the investment that you have made with the cost of the investment. Below are the formulas for ROI calculation:
Steps to Calculate ROI
Now that you know what is ROI, you must be wondering how to calculate it. Here we show you the steps you can follow to arrive at your investments Return on Investment.
Steps to Calculate ROI
Now that you know the meaning of ROI, you must be wondering how to calculate it. You can estimate ROI in two easy steps: