How To Calculate A Return On Investment?

Posted by Grace under Investing on August 22, 2015

Do you want to know how to calculate a return on investment easily? Calculating ROI is very easy, just follow the step by step given in this page. If you are already investing, you are familiar on how to compute ROI, might be in stocks, other paper assets such as mutual funds, bonds and trust accounts in the bank.

In my own experience, the best investment vehicle than can give my money a good rate of return is investing in the stock market. Although it is risky, I am quiet familiar with this investing. All I need to do is to choose the best stocks to buy, I would choose a company stocks that I am very familiar with. Example, I know in electronic industry, one leading companies is Apple, Inc (AAPL). Therefore, I will be more comfortable buying AAPL stocks rather than other stocks available in the market.


Going back to the topic, the return on investment in every vehicle should analyze month after month to know if your making profits or just losing your investment capital.

how to calculate a return on investment

Calculator : Photo Credit: Tracy O CC 2.0

Related: Good Rate o Return On Investment

How to Calculate A Return on Investment?

You need a online calculator, a spreadsheet or using your personal calculator or cellphone. First, analyze the total money you invested in each investment vehicles, see example;
Real Estate: $200,000
Mutual Funds: $100,000
Stock Market: $100,000
Bonds: $100,000

The total invested money is half million dollars, right? After you have calculated the total investment, you need to analyze the profits (gains) or loss in each of their market value.

Real Estate Market Value: $230,000 (Profit: $30,000)
Mutual Funds: $115,000 (Profit: $15,000)
Stock Market: $120,000 (Profit: $20,000)
Bonds: $101,000 (Profit: $1,000)

Related: Meaning of Return on Investment

The total profits you made in this investment portfolio is around $66,000. It means you gained 13.2% from your total invested capital. Your ROI then will be $566,000 (from $500,000 to $566,000). If you think this computation is wrong, please do share it in the comment box and share your own thoughts on how to calculate ROI or return on investment. To make it simple, you can download any software or mobile apps related to ROI calculator. Stay tuned to, thank you!

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