What is ROI?
Return on Investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment. It measures the amount of return on a particular investment, relative to the investment's cost.
The Formula
ROI = (Net Profit / Cost of Investment) x 100
Annualized ROI
If you hold an investment for multiple years, the simple ROI doesn't tell the whole story. The Annualized ROI calculates the geometric average amount of money earned each year.