Academy Crypto Basics

How to calculate ROI

ROI is a payback ratio, a term applied to a business and any investment, e.g a cryptocurrency one.

It totally makes sense to compare the suggested investment options and choose one with the highest ROI.

So how do we calculate ROI in the most accurate way?

Go ahead and use the formula: 

ROI = Net Income / Net Investment

Where the net investment equals 

purchase price + transaction costs

and net profit:

Sale price – Net investment

If you multiply the total value by 100, you may get ROR, which is the internal rate of return but in a percentage form.

For example, if you buy 10 ETH (Ethereum) coins $ 1,500 per unit plus a $ 3 BNB (Binance blockchain) transaction fee and 0.1% CEX exchange fee for placing an order. After a while, you may suddenly notice that the rate has already risen to $ 2500 and decide to fix the profit: but the commissions of $ 3 BNB and 0.1% CEX keep on showing up again.

That means in this particular case ROI = 10 x 2500 – ((10 x 1500) + 3 + 15) / (10 x 1500) + 3 + 15 = 25,000 – 15,000 + 18 / 15,000 +18 = 0.66

Your ROI is 0.66. Multiplying by 100, we get 66% ROI for the Ethereum coin.

Don’t forget Ethereum and other high-value assets are available on ZamEx without any (!) commissions.

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