Gain divided by cost — the universal “was it worth it” ratio.
ROI is simple by design and blind by design: it ignores time and risk. A 30% ROI over one year and over ten years are radically different investments.
Formula: ROI = Gain ÷ Cost × 100
Example: $45,000 profit on $150,000 invested = 30% ROI.
FAQ
What is ROI in simple terms?
ROI is simple by design and blind by design: it ignores time and risk. A 30% ROI over one year and over ten years are radically different investments.
How is it calculated?
ROI = Gain ÷ Cost × 100. Example: $45,000 profit on $150,000 invested = 30% ROI.