In the course of penetrating recession P2P lending is one of the most talked about topic in UK, as per the depreciating banks are concerned. However, lenders worry on the amount of returns they may earn. At the same time, it is important for lenders to define appropriate interest rate, so as to assure better returns over the period of time. It is thus important for a lender to calculate his returns on the investment and decide before undertaking the decision to lend.
Investment through any measure is done to earn in return and calculating the returns on the investment is often treated to be a tough job. However, calculating return on investments can be schemed with appropriate data and the correct formula. Return on investment (ROI) is expressed as a percentage of performance over the investment, in the given period of time.
While you sit down to multiple and divide you should be ready with all your financial statements a calculator and the paper and pencils of course.
Calculate the profits or losses that you gain of your investments and add your expenses from the financial statements. Now divide the profit or the loss by the total expense and generate a percentage count. The percentage is the percentage return on the investment.
