ROI (Return on Investment)

The percentage gain or loss on an investment relative to its cost.

ROI = (Gain - Cost) / Cost × 100. If you invest $10,000 and it grows to $13,000, your ROI is 30%. ROI does not account for time — a 30% return in 1 year is very different from 30% over 10 years. For time-adjusted comparisons, use annualized return (CAGR). A $10,000 investment becoming $13,000 over 3 years has a CAGR of about 9.1%.

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