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## How do you calculate return on investment example?

Return on investment (ROI) is **calculated by dividing the profit earned on an investment by the cost of that investment**. For instance, an investment with a profit of $100 and a cost of $100 would have a ROI of 1, or 100% when expressed as a percentage.

## How do we calculate return?

**Key Terms**

- Rate of return – the amount you receive after the cost of an initial investment, calculated in the form of a percentage.
- Rate of return formula – ((Current value – original value) / original value) x 100 = rate of return.
- Current value – the current price of the item.

## How do I calculate percentage return?

**Divide the ending amount by the starting amount**. For example, if you started with a $44,000 investment and ended with a $54,000 value, you would divide $54,000 by $44,000 to get 1.2273. Subtract 1 from the previous step’s result to find the return expressed as a decimal.

## How do I calculate compounded rate of return?

**To calculate the CAGR of an investment:**

- Divide the value of an investment at the end of the period by its value at the beginning of that period.
- Raise the result to an exponent of one divided by the number of years.
- Subtract one from the subsequent result.
- Multiply by 100 to convert the answer into a percentage.

## How do I calculate percentage return on investment in Excel?

**How to calculate ROI in Excel**

- Open Excel. Open Microsoft Excel using your PC or MAC computer. …
- Label cells. …
- Enter the investment amount. …
- Enter the financial gain from your investment. …
- Input the formula. …
- Change to a percentage.

## How do you calculate percentage return on a portfolio?

**How Do I Calculate Rate of Return of a Stock Portfolio?**

- Subtract the starting value of the stock portfolio from then ending value of the portfolio. …
- Add any dividends received during the time period to the increase in price to find the total gain.