# Return On Income Calculator

### Introduction

A Return on Income (ROI) Calculator is a useful tool for evaluating the efficiency of an investment or comparing the efficiency of several different investments. It measures the amount of return on an investment relative to the investmentâ€™s cost. This article will guide you on how to use the ROI Calculator, provide the formula used, an example calculation, and answer some frequently asked questions.

### How to Use the ROI Calculator

Using the ROI Calculator is straightforward:

- Enter the net profit from the investment.
- Enter the total income.
- Click the “Calculate” button to get the ROI result.

### Formula

The formula for calculating Return on Income (ROI) is:

### Example Solve

Let’s consider an example:

**Net Profit**: $50,000**Total Income**: $200,000

Using the ROI formula:

### FAQs

**What is Return on Income?**

Return on Income is a measure of the profitability of an investment expressed as a percentage of the total income.

**Why is ROI important?**

ROI is important because it helps investors gauge the efficiency of an investment and compare the profitability of multiple investments.

**Can ROI be negative?**

Yes, ROI can be negative if the net profit is negative, indicating a loss on the investment.

### Conclusion

The Return on Income Calculator is a simple yet powerful tool to assess the profitability of investments. By understanding and utilizing this tool, investors can make more informed decisions and optimize their investment strategies.