Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments. ROI tries to directly measure the amount of return on a particular investment relative to the cost of the investment.
To calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment. The result is expressed as a percentage or a ratio.
Basically, the return on investment (ROI) tells you how much money you have earned (or lost) relative to the cost of an investment or project.
The "present value of the investment" refers to the proceeds from the sale of an investment with interest. Because ROI is measured as a percentage, it can be easily compared with returns from other investments, allowing the individual to measure different types of investments. each other.
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