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# How to Calculate Return on Investment (ROI) - Online Calculator

##### Return on Investment (ROI)

The Return on Investment (ROI) is the key measure to derive an approximate profit gained from an investment. It is basically a ratio that will tell you the approximate profit or loss that you might derive from a particular investment in relation to its cost. Basically, with an ROI calculator, you will get to know whether it is safe to invest in a particular thing.

Higher education and especially MBA has become extremely expensive. Therefore, it becomes really important to get admission to a college that helps you get a job which is worth all the investment you made into that college.

Hence, you must calculate the approximate ROI that you will get before you make such a large investment like an MBA degree.

Now, you must be wondering how this ROI is calculated and if it is even credible. Well, it isn't easy, but hey, it‘s the 21st century and the technology is quite advanced. So, the calculator here gives you an approximate ROI if you put in the correct values.

Now, let us know the science behind calculating this ROI.

##### How to Calculate the ROI?

The Return on Investment (ROI) is roughly calculated by subtracting the initial investment cost from the final investment cost and then dividing the answer by the initial investment cost, and then finally multiplying this number by 100 to get the ROI percentage. Let us understand this better with the formula-

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##### FAQs on How to Calculate ROI

ROI stands for the Return on Investment, which means it is an approximate measure of how much are you going to gain or lose by investing in a particular thing relative to the investment cost.

An ROI of 20% means that by investing a particular amount for a particular period, you are gaining 20% more than your investment amount. For example, if you invested ₹100 for a year and then after a year you are receiving ₹120, this means you are getting an ROI of 20%.

The formula for ROI is as follows:

###### ROI = Net Profit ÷ Investment x 100

Where, Net Profit=Final Cost of Investment-Initial Cost of Investment.

In the case of education, your initial cost of investment is the fees you pay for the course while the final cost of investment would be the salary package that you receive in a job after graduation. However, in this case, there are other important factors to keep in mind like the time for which you have made the investment which would be the duration of your course. Also, if you have a job before the graduation or during the graduation, the salaries or the savings from these also play a major role.

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