How to calculate return on investment over time?
See calculating return on investment is actually very simple. You just need to know this formula and you’ll be able to calculate ROI on your own.
The formula is:
Current value of investment - actual investment made/ actual investment amount)*100
To calculate return on investment, you should know these things:
- How much did you invest initially?
- How much is the current worth of your investment?
- What is the net profit gain?
Once you have these with you, getting ROI percentage will be a piece of cake.
I am sharing a basic example with you below for better understanding on how to calculate ROI on investment:
Assume you invested Rs. 100,000 in shares. Now those shares are worth Rs. 110000 and you earn dividends of Rs. 5000.
Let us start by calculating your net profit = Rs. 115000 - Rs. 100000 = Rs. 15000.
The ROI would be: (115000 - 100000/100000)*100 = 15%