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30 November, 21:46

A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI?

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  1. 1 December, 01:04
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    Given:

    Initial Investment = 10,000

    Total profit = 25,000

    Total number of years = 5 years

    Return on Investment = Gain from Investment - Cost of Investment

    cost of investment

    ROI = (25,000 - 10,000) / 10,000 = 15,000/10,000 = 1.5 x 100% = 150%

    ROI = 150% : 5 years = 30% per year.
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