ROI Formula Explained, With Examples
Every roi result comes from one formula. Once you understand what goes into it, you can sanity-check any figure you are given, whether by an employer, a bank, a teacher or another website.
The formula
ROI = (return − cost) ÷ cost × 100.
What each input means
- Amount invested (S$): the value you enter in the calculator.
- Amount returned (S$): the value you enter in the calculator.
Example
For example, with these inputs:
- Amount invested (S$): 10,000
- Amount returned (S$): 12,500
the calculator returns:
- Profit: S$2,500.00
- Return on investment: 25.00%
How the result changes
The table keeps the other inputs at their example values and changes amount invested (s$).
| Amount invested (S$) | Profit | Return on investment |
|---|---|---|
| 10,000 | S$2,500.00 | 25.00% |
| 5,000 | S$7,500.00 | 150.00% |
| 7,500 | S$5,000.00 | 66.67% |
| 12,500 | S$0.00 | 0.00% |
| 15,000 | -S$2,500.00 | -16.67% |
Why it matters
Interest rates, instalments and returns compound over years, so a small difference in rate or tenure turns into thousands of dollars. Working the numbers out yourself makes it easier to compare bank offers, avoid expensive debt and plan savings goals.
Cars in Singapore carry costs found almost nowhere else, including the Certificate of Entitlement and the Additional Registration Fee. Loans are capped at 60% or 70% of the price depending on the car's Open Market Value, and the maximum tenure is seven years.
Inflation erodes buying power, so a savings goal set in today's dollars needs to be adjusted upwards for the years it will take to reach it. Singapore's core inflation has varied widely over the past decade, so it is worth testing a range of rates.
Calculators make it easy to compare scenarios side by side: a shorter tenure versus a lower instalment, a higher deposit versus more cash in hand, or paying down debt versus investing. Seeing the total cost, not just the monthly figure, usually makes the better choice obvious.
Related calculations
- Maximum Car Loan Calculator: MAS rules cap car loans at 70% of the price if OMV is S$20,000 or less, and 60% if OMV is higher, with a maximum tenure of 7 years.
- Additional Registration Fee (ARF) Calculator: Calculates the tiered ARF for cars registered in Singapore.
- Car Depreciation Calculator: Works out the yearly depreciation buyers in Singapore use to compare used cars.
- Loan Calculator: Calculates repayments for an amortising loan.
Use the ROI Calculator to plug in your own numbers.
Run your own numbers: ROI Calculator