Return on Investment Calculator: An Easy to Understand Guide

Hello, everyone! Today we're going to talk about a simple but important topic: return on investment calculators. They're not just a calculation tool, they're also an important way to judge the success of an investment. Knowing how to use them can help us fine-tune our investment strategy.

What is a return on investment calculator?

Simply put, a return on investment calculator is a tool that shows you how much money you've invested has grown or lost in percentage terms. It can be used for many different types of investments, including stocks, real estate, bonds, and more.

How to calculate return on investment

Return on investment is calculated using the following formula.

Return on investment (%) = [(value at the end of the investment - value at the beginning of the investment) / value at the beginning of the investment] * 100

By using this formula to calculate the return on investment, we know exactly how our investment performed. If this return is positive, the investment has made a profit, and if it is negative, it has lost money.

Example of calculating return on investment

For example, if you invested $100,000 a year ago and it's now worth $120,000, what is your return on investment? According to the formula, you can calculate it as follows.

Return on investment (%) = [(120,000 won - 100,000 won) / 100,000 won] * 100 = 20

So, in this case, the return on investment is 20%, which means that we made a 20% profit in one year.

Closing.

The return on investment calculator is a very important tool for measuring the performance of our investments. With this tool, we can know exactly how effective our investment strategy is. Therefore, it is important to understand how to calculate the return on investment and use it in practice.

We hope you found today's article useful in your investing endeavors. See you in the next installment!

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This article is intended to give you a basic understanding of return on investment calculators. We recommend that you seek professional advice before making any actual investment decisions.

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