ROI (Return on Investment)
InvestingA measure of the profitability of an investment, calculated as the gain divided by the cost, expressed as a percentage.
Example
Example: You invest $25,000 in a rental property renovation. Monthly rent increases from $1,200 to $1,600, adding $400/month ($4,800/year) in income. ROI = $4,800 / $25,000 = 19.2% annual return. The renovation pays for itself in 5.2 years, then generates pure profit. Use our ROI calculator.