- How to Calculate the Total Return on a Trading Investment Portfolio
- How to Calculate the Annual Percentage Yield on an IRA Account
- How to Calculate Multiple Year Holding Period Returns With Dividends
- How to Calculate the Annualized Holding Period Return
- How to Calculate Growth of Investment Formulas
- Example of a Return on Shareholders Investment Ratio
Your return on investment, or ROI, tells you how much your investment earned you, expressed as a percentage. As an example, if you invested $100, and it grew to $200, you would have earned a 100 percent return on investment, which means you doubled it. An ROI may be annualized, which expresses your yearly investment return, but this doesn't describe your overall success. An overall ROI disregards the length of time in the investment and produces the total percent yield.
Add all the costs associated with the investment. As an example, if you purchased 100 shares of stock for $10 and paid a $25 brokerage fee when you initially bought and subsequently sold the stock, your total investment would be $1,050.
Calculate the gross return from the investment. In the example, if you sold the 100 shares of stock five years later for $20 per share, you would have received $2,000.
Subtract your total investment from the gross return. In the example, $2,000 minus $1,050 gives you a net profit of $950.
Divide the net profit by your total investment to calculate the return on investment. In the example, $950 divided by $1,050 gives you 0.905.
Multiply this figure by 100 to convert it into percentage format. In the example, 0.905 times 100 gives you a total return on investment of 90.5 percent.