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Yield (ROI = Return Of Investment) formula question

  1. Aug 20, 2007 #1
    [SOLVED] Yield (ROI = Return Of Investment) formula question

    The Calculation of simple yield:

    The Return*
    (Winnings)
    __________ X 100= ROI (%)

    Investment*
    (Stakes)


    so for example: I have 1000 bets with odds 2,00
    500 of them are winning and 500 losing. So i am on 0 and my ROI is zero

    Would like to get right odds to have 15% yield,
    How to calculate on what odds should i be to have ROI 15% ?
    Because odds are not always 2,00 - they are different but i gave 2,00 as example...

    So, i know what are odds to have 0% yield, but would like to get with some formula odds to have 15% yield (ROI)!?

    Thanks very much for help!
    Ivica
     
  2. jcsd
  3. Aug 20, 2007 #2

    CRGreathouse

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    Homework Helper

    Let p = 1/odds be the probability of success, and R = 2 be the amount you win on a success (as a multiple of the amount you put down). Suppose you play n games, where n is large (in your case n = 1000, but it doesn't really matter).

    Expected winnings are npR, and expected cost is n. ROI is (npR - n)/n = pR - 1.

    If you want ROI to be 0.15, just solve pR - 1 = 0.15. If R is fixed at 2.00, solve 2p - 1 = 0.15.
     
  4. Aug 20, 2007 #3
    Thanks for answering, but I'm not that good in maths, so could you please give me calculation on some example?
    Let's say i have odds of 1,50 (so probability is 66,66%) so to receive odds which would provide us ROI of 15%
    I'm trying to do it into excel formula, but don't understand all what you write...
    so please if you could calculate it step by step... tnx
     
  5. Aug 20, 2007 #4

    EnumaElish

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    In Excel:
    1. Enter R to cell A1
    2. Enter ROI to cell B1
    3. To cell C1, enter formula "= A1/(1 + B1)"
     
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