Calculate Return on Investment (ROI) to measure the profitability of an investment relative to its cost. Key metric for financial decision making.
A positive ROI means you made money. 'Good' depends on the risk and time frame; 7-10% annually is often cited for stocks.
Standard ROI does not account for time. Annualized ROI is a more complex calculation that factors in how long the investment was held.
ROI = (Gain-Cost)/Cost