ROI Calculator
Calculate return on investment as a percentage
Interactive Sandbox
Adjust values in real-time and observe mathematical cause-and-effect
Exponential Compounding Growth: Returns generate subsequent returns over time t, rapidly accelerating capital growth.
Variable Mechanics
Roles, constraints & impacts
Final Value
Formula Parameter
Initial Cost
Formula Parameter
At a Glance
Gotchas, units & real-world use
Formula Nature & Mechanics
Exponential Compounding Growth: Returns generate subsequent returns over time t, rapidly accelerating capital growth.
Common Mistakes & Traps
- Entering annual percentage rate (e.g. 7%) as 7 instead of converting to decimal 0.07.
- Neglecting the compounding frequency (n): monthly compounding produces higher yield than annual.
- Ignoring inflation drag when evaluating long-term nominal returns.
Dimensional Analysis & Units
Currency × (1 + rate)^time = Future Currency ($)
Real-World & Industry Application
Retirement 401(k) / Roth IRA compounding, mortgage amortization schedules, bond yield analysis, and inflation depreciation modeling.
Worked Example: ROI
Given:
- gain = 15000
- cost = 10000
- ROI = ((15000 - 10000) / 10000) × 100
- ROI = (5000 / 10000) × 100
- ROI = 50%
Answer: 50
Frequently Asked Questions
What is the ROI formula?
ROI = ((Gain - Cost) / Cost) × 100. Calculate return on investment as a percentage.
How do I calculate ROI?
Enter Final Value (gain), Initial Cost (cost) into the calculator. It applies ROI = ((Gain - Cost) / Cost) × 100 and shows every step of the working.
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