[strategy]

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> Post #2 | Regarding Calculating ROI (return on investment) | 2008
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[strategy]

Original Question from ARREZO:

Hello, I just have a few questions on calculating ROI

If you are investing $1,000 and you profit $1,500 and made $1,000
investment back. so you come up with $2,500. what would be your ROI?

Thank you

Answer by TechAfrica:

ROI=net profit(i.e. total revenue-total costs-tax) divided by total investment.
This is often corrected for inflation. For your example,neglecting taxes and other costs, the RIO is 150%. A very good investment !!

Add on by akula:

Return calculations need to be expressed on a per annum basis, otherwise they cease to be useful, because you can't compare them to the risk free rate of return. Therefore to calculate the return, I need to know the date for when the investment was bought, and the date at which it was sold for a profit.