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Chapter 09: How to Calculate Your Return on Investment (ROI)

So far in our investing series, we’ve covered a lot of important topics about investing, such as the different types of investments, the benefits of investing, how to invest in real estate, and more. These are all necessary topics that you need to know so that you can have a solid grasp of how investing works. And in this chapter, we’ll be discussing how to calculate ROI.

The goal of this chapter is to provide you with a basic understanding of how to calculate return on investment, or ROI. ROI is a metric that is used to evaluate the profitability of an investment. It’s a ratio that compares how much you paid for an investment versus how much you earned from it. Knowing how to calculate ROI is crucial so that you can understand the efficiency of your investments and make smarter financial decisions.

And fortunately, you can use an investment calculator to help you calculate your ROI. To learn more about how to calculate ROI and how you can use our investment calculator to do so, continue reading this chapter or use the links below to skip to a section that best answers your question. 

  • Investment Calculator
  • How to Use The Investment Growth Calculator
  • Important Investing Terms to Know
  • FAQs
  • Final Notes

Investment Calculator

Managing your money can be a challenging feat, especially when you have multiple sources of income to account for. Our investment calculator makes monitoring your investment income unintimidating, intuitive, and effective.

By entering a few key figures, you can create investment goals, forecast investment growth, and search for opportunities to boost your portfolio’s success!

Investment Calculator
First, tell us about your investment plan by filling in the fields below.
1Investment Plan:
Starting Amount:
 
Amount of initial investment: Total amount you will initially invest or currently have invested toward your investment goal.
Years to Accumulate:
 
Years to accumulate: The number of years you have to save.
Expected Rate of Return:
 
Expected rate of return on investment: This is the rate of return an individual would expect from their investment. It is important to remember that these scenarios are hypothetical and that future rates of return cant be predicted with certainty and actual rate of return can very widely over time.
Contribution Amount:
 
Periodic contribution: The amount you will contribute each period and the frequency at which you will make regular contributions to this investment.
* Figures are calculated at the end of the specified period
2Taxes:
Overall Effective Tax Rate:
 
Overall effective tax rate: Effective Tax Rate (ET)=Taxes Paid / Taxable Income. The effective tax rate is the average tax rate paid on all of an individuals income. If you do not know your Effective Tax Rate you can enter your Marginal Federal Tax Rate
Your Investment Results:
Balance in Year 2020: $0
Reset
$0
Starting Amount
$0
Total Contributions
$0
Total Growth
Investment Growth Over Time
 
Investment Breakdown
.Starting Amount
.Total Contributions
.Total Growth
 

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This post first appeared on MintLife Blog | Personal Finance Advice & News, please read the originial post: here

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Chapter 09: How to Calculate Your Return on Investment (ROI)

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