Investment Return (ROI)
Profitability of an investment relative to its cost.
Definition
Return on Investment (ROI) measures how much profit or loss an investment generates relative to its cost. Expressed as a percentage.
Example
Investing $1000 and earning $150 results in ROI = 15%.
Calculation
ROI=Gain from Investment÷Initial Investment× 100%
Example: Investing$1000 and earning$150 results in:
ROI =150 ÷ 1000 × 100%
ROI ≈15%
ROI =150 ÷ 1000 × 100%
ROI ≈15%