Finance

Farm Return on Investment Calculator (15 Years)

Calculate return on investment as a percentage. This farm version uses a 15-year planning term as its starting point.

The Return figure is the total percentage gain over the whole 15 years, so a positive value means the final value is higher than the amount invested, and the same percentage spread over a longer period means a slower yearly pace than the same percentage over a shorter period.

Formula

Return equals final value minus invested amount, divided by invested amount, times 100.

How it works

A positive return means the final value is higher than the amount invested.

Worked example

Amount invested $10,000, final value $15,000, term 15 years. First, the gain is $15,000 minus $10,000, which is $5,000. Using the page formula, return is $5,000 divided by $10,000, times 100, which is 50.00%. That is the total return over the whole 15 years, not a yearly rate. As an illustration only, not the output of this page, the annualised rate behind the same result is about 2.74% a year, because $15,000 divided by $10,000 is 1.50, and the 15th root of 1.50 is about 1.0274. Over 15 years the yearly pace is modest: the gain has taken a decade and a half to arrive, through several price cycles and probably one equipment replacement. For farm planning this is a patience test: a 15-year return should be judged on whether the farm asset is still in good working order, not only on the headline percentage.

Who this term suits for a farm household: a farm household that built a barn, a storage shed or a fencing scheme about 15 years ago, and is checking whether that building has returned half its cost again before it needs its first major repair.

FAQs

What is a good ROI?
There is no single good figure. Compare returns over the same period and with the same risk before deciding.

Is this farm calculator exact?
No, it is an estimate for planning only, based on the numbers you enter.

Are these figures financial advice?
No, they are estimates for planning only, not financial advice. Check with a qualified adviser for decisions involving large sums.

Is 50.00% over 15 years still a win for a farm investment?
Only if the asset is still sound. At about 2.74% a year as an illustration, the gain is modest, and if the barn or fencing now needs a costly repair, much of the $5,000 gain may already be spoken for.

What farm costs can eat into a 15-year return?
Maintenance, replacement parts, labour and rising input prices. The page figure is nominal and before fees and taxes, so none of those costs are taken out of the 50.00% headline.

Should a second farm purchase be judged on a 15-year figure?
Only as a rough guide. A second purchase, such as another shed or a new bore, faces today's prices and today's interest rates, not the conditions of 15 years ago.

Estimates only, not financial advice. Figures are approximate and do not include all fees, taxes, or changing rates unless stated.