1. What is ROI?

Return on Investment (ROI) is a financial metric used to measure the probability of gaining a return from an investment. It compares the magnitude and timing of investment gains directly with the magnitude and timing of investment costs.

2. How Does the Calculator Work?

The calculator uses the ROI formula:

Where:

• \( Gain \) — Total revenue from investment (AED)
• \( Cost \) — Total cost of investment (AED)

Explanation: ROI is expressed as a percentage and can be used to compare different investment opportunities.

3. Importance of ROI Calculation

Details: ROI helps investors determine which investment opportunities are most profitable and worth pursuing, especially important in Dubai's dynamic real estate and business markets.

4. Using the Calculator

Tips: Enter both gain and cost in AED (UAE Dirhams). Cost must be greater than 0 for calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is a good ROI in Dubai?
A: In Dubai's real estate market, ROI of 5-8% is generally considered good, though this varies by property type and location.

Q2: How is ROI different from profit?
A: ROI measures efficiency of investment (percentage return), while profit measures absolute monetary gain.

Q3: What time period should I use for ROI calculation?
A: Typically annual ROI is calculated, but you can calculate for any period as long as gain and cost cover the same period.

Q4: Does this calculator account for inflation?
A: No, this is a basic ROI calculator. For more precise calculations in Dubai's market, inflation and other factors should be considered.

Q5: Can I use this for business investments?
A: Yes, this calculator works for any type of investment - real estate, business ventures, stocks, etc.