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Return on Investment or ROI shows you the return from your investments. It helps you to choose the best investment across different investment options. You may evaluate the investment based on your financial goals and risk tolerance. You could also gauge the cost of your investment and look for hidden charges that could eat up your returns. The return on investment is usually expressed as a percentage. In simple terms, the return on investment is a financial ratio that helps you determine the benefit of your investment against the costs. You may calculate the return on investment using the formula: ROI = Net Profit / Cost of the investment * 100 If you are an investor, the ROI shows you the profitability of your investments. If you invest your money in mutual funds, the return on investment shows you the gain from your mutual fund schemes. ROI may be positive or negative. If the return on investment is negative, you are actually losing money on the investment. You must pick an investment that may offer you the maximum return over a period.

The ROI calculator is a simulation that helps you gauge the profitability of your investments. You may use the ROI calculator to determine the return from investments across various periods. The ROI Calculator consists of a formula box, where you enter the initial amount invested, the amount returned, and the investment period. The ROI Calculator shows you the total gain on investment. It also shows you the absolute return on investment, annualised return on investment, and the CAGR or the compounded annual growth rate.

You must understand the difference between the absolute return on investment and the annualised return on investment. Absolute returns can be calculated using the formula: (The end value of the investment – Initial value of the investment)/ Initial value of the investment You can convert the return to a percentage by multiplying by 100 For example, you have an initial investment of Rs 25,000 that has grown to Rs 30,000. You may calculate the absolute return as : 30,000 – 25,000 / 25,000 = 20%. The absolute return measures the performance of the stock market for periods of less than one year. If you want to determine the performance of an investment over different holding periods, you use the annualised return on investment. Annualised return can be calculated with the following formula: End Value – Beginning Value/Beginning Value * 100 * (1/holding period of the investment) For example, you had bought a house for 30 lakh in January 2010 and sold it for Rs 50 lakh in January 2020. You have the initial value of the investment as Rs 30 lakh and the final value of the investment as Rs 50 lakh. You have held the investment for five years. The holding period is five years. Annualised Return = 50,00,000 – 30,00,000 / 30,00,000 * 100 * (1/5) Annualised Return = 13.33%. You may annualise the absolute return by multiplying by the factor:

- 365 / number of days the investment was held.
- 12 / holding period of investment in months.
- 1 / holding period of the investment in years.

A percentage calculator is a tool used to perform calculations involving percentages. It can be a physical device like a specialized calculator, a software application on a computer or phone, or even a simple online tool.

Percentage calculators work by using formulas to perform calculations based on percentages. They typically involve two numbers as input:

**Base Value:**This represents the whole amount or starting point for the calculation.**Percentage or Related Value:**This could be the actual percentage itself, the final amount after a percentage change, or the amount of change based on a percentage.

Depending on what you’re trying to find, the calculator uses a specific formula. Here are some common examples:

**Finding a percentage of a number:**`percentage / 100 * base value`

**Finding the percentage change:**`(current value - base value) / base value * 100`

**Finding a final amount with a percentage change:**`base value * (1 + percentage / 100)`

(for markup) or`base value * (1 - percentage / 100)`

(for markdown)

The calculator then processes these values and displays the result as a percentage value, typically rounded to two decimal places.

Percentage calculators offer several benefits:

**Save Time:**They can perform calculations quickly and accurately, eliminating the need for manual calculations.**Ensure Accuracy:**They minimize the risk of errors that can occur with manual calculations.**Versatility:**They can handle various tasks, from everyday calculations like tipping to complex financial calculations.**Accessibility:**They are readily available in various forms, making them convenient for different situations.pen_spark

An annualized return calculator is a tool that helps you estimate the average yearly return on an investment over a specific holding period (the time you hold the investment). It considers the compounding effect of interest or capital gains, which means your earnings are reinvested and also earn returns.

The calculator uses a formula that takes into account three factors:

**Initial Investment:**The amount of money you invest initially.**Ending Balance:**The total value of your investment at the end of the holding period, including any gains or losses.**Holding Period:**The duration you hold the investment, typically expressed in years.

Here’s the formula used for calculating annualized return:

```
Annualized Return = (((Ending Balance / Initial Investment) ^ (1 / Holding Period)) - 1) * 100
```

**Simplicity:**It simplifies the process of calculating annualized return, which can be tedious and error-prone manually, especially for long holding periods or complex investments.**Comparison:**It allows you to compare the performance of different investments over the same timeframe by providing a standardized annualized return figure.**Decision-Making:**It can help you make informed investment decisions by providing a clearer picture of the potential long-term returns you might expect.

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