Enter the total income ($) and the total investment ($) into the Return on Income Calculator. The calculator will evaluate and display the Return on Income.
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Return on Income Formula
The following formula is used to calculate the Return on Income.
ROINCOME = TI / TINV * 100
- Where ROINCOME is the Return on Income (%)
- TI is the total income ($)
- TINV is the total investment ($)
How to Calculate Return on Income?
The following example problems outline how to calculate Return on Income.
Example Problem #1:
- First, determine the total income ($).
- The total income ($) is given as: 4,000.
- Next, determine the total investment ($).
- The total investment ($) is provided as: 10,000.
- Finally, calculate the Return on Income using the equation above:
ROINCOME = TI / TINV * 100
The values given above are inserted into the equation below and the solution is calculated:
ROINCOME = 4,000 / 10,000 * 100 = 40.00 (%)
FAQ
What is Return on Income?
Return on Income (ROINCOME) is a financial metric used to measure the percentage of income that is generated from a particular investment. It is calculated by dividing the total income by the total investment and then multiplying the result by 100 to get a percentage.
Why is calculating Return on Income important?
Calculating Return on Income is important for investors and business owners as it helps them assess the efficiency of an investment. It provides insight into how well an investment is performing in terms of generating income, helping to make informed decisions about where to allocate resources for maximum returns.
Can Return on Income be negative?
Yes, Return on Income can be negative if the total income generated from an investment is less than the total investment made. A negative Return on Income indicates that the investment is losing money rather than generating profit, signaling potential issues that may need to be addressed.
