ROI Calculator (Return on Investment)
Calculate the total and annualized Return on Investment (ROI) for any investment — stocks, mutual funds, real estate, gold, a business, or a marketing campaign. Just enter what you put in and what you got back.
What Is ROI (Return on Investment)?
Return on Investment (ROI) is the simplest and most widely used profitability metric. It measures how much profit (or loss) you've made relative to the amount you originally invested, expressed as a percentage. The basic formula is:
ROI (%) = [(Final Value − Initial Investment) ÷ Initial Investment] × 100
ROI is used everywhere — from evaluating a stock purchase, a flat bought for resale, gold holdings, a small business, or even the return on a digital marketing campaign (where "investment" is ad spend and "return" is revenue generated). Its biggest strength is simplicity; its biggest weakness is that it says nothing about time. A 50% ROI over 1 year is excellent, but the same 50% ROI over 10 years is mediocre.
Total ROI vs. Annualized ROI (CAGR)
This calculator gives you two numbers:
- Total ROI — the overall percentage gain across the entire holding period, regardless of how long it took.
- Annualized ROI (CAGR) — the Compound Annual Growth Rate, i.e., the constant yearly rate of return that would produce the same overall result. The formula is: CAGR = [(Final Value ÷ Initial Investment)^(1/Years)] − 1.
The annualized figure is far more useful for comparing investments with different holding periods. For example, a fixed deposit returning 7% per year for 5 years has a total ROI of about 40.3% — but it would be misleading to compare that 40.3% directly against a stock's total ROI over a 2-year holding period without annualizing both.
Worked Example
You bought shares worth ₹1,00,000 three years ago, and today they're worth ₹1,50,000:
- Net Profit = ₹1,50,000 − ₹1,00,000 = ₹50,000
- Total ROI = (50,000 ÷ 1,00,000) × 100 = 50%
- Annualized ROI (CAGR) = (1,50,000 ÷ 1,00,000)^(1/3) − 1 ≈ 14.47% per year
That 14.47% annualized figure is what you'd compare against, say, an SBI fixed deposit currently yielding around 6-6.5%, or against your equity mutual fund's 3-year CAGR, to judge whether this was a good investment relative to alternatives.
Common ROI Use Cases in India
1. Real Estate
For property, ROI should ideally include both capital appreciation and rental income. If a flat purchased for ₹50 lakh is now worth ₹70 lakh after 5 years and also generated ₹2 lakh/year in net rental income (₹10 lakh total), your total return is ₹30 lakh on ₹50 lakh = 60% total ROI, or roughly 9.86% annualized — before accounting for stamp duty, registration, brokerage, and maintenance costs, all of which should be added to your "initial investment" for an accurate picture.
2. Stocks and Mutual Funds
For listed investments, always use annualized ROI (CAGR) to compare against benchmarks. Large-cap equity funds in India have historically delivered around 11-12% CAGR over long periods, while mid-cap funds have delivered higher but more volatile returns (historically 15-17% CAGR over some long cycles, with much wider swings year to year).
3. Gold
Gold is often used as a portfolio diversifier and inflation hedge. Calculate ROI on gold the same way — using the purchase price (including making charges if jewellery) versus the current market value.
4. Business and Marketing
Outside personal finance, ROI is widely used to judge business decisions — for example, "marketing ROI" compares the revenue generated by a campaign against its total spend (ad budget, creative costs, agency fees). A campaign costing ₹2 lakh that generates ₹6 lakh in attributable sales has an ROI of 200%. Business owners often track ROI per channel (search ads, social media, offline) to decide where to allocate next quarter's budget.
Important Limitations of ROI
- Ignores taxes: ROI is typically calculated pre-tax. For Indian equity investments, Long-Term Capital Gains (LTCG) above ₹1.25 lakh/year are taxed at 12.5%, while Short-Term Capital Gains (STCG, held under 1 year) are taxed at 20%. Always factor this into your "Final Value" for a true picture.
- Ignores cash flow timing: If you invested money in multiple tranches (like a SIP) rather than a lump sum, a simple ROI formula doesn't capture this accurately — use an XIRR calculation instead for SIP-style investments.
- Doesn't account for risk: A high ROI from a volatile or illiquid asset isn't directly comparable to the same ROI from a safe, liquid one.
Frequently Asked Questions
What's the difference between ROI and CAGR?
ROI is the total percentage gain over the entire period, with no regard to time. CAGR (annualized ROI) converts that total gain into an equivalent constant yearly growth rate, making it possible to fairly compare investments held for different lengths of time.
How do I calculate ROI if I made multiple investments over time (like a SIP)?
The simple ROI formula assumes a single lump-sum investment at the start. For staggered investments (SIPs, multiple purchases), you should use an XIRR (Extended Internal Rate of Return) calculation, which accounts for the exact dates and amounts of each cash flow. Our SIP and SWP calculators handle this scenario.
Should I include costs like brokerage, taxes, and fees in my ROI calculation?
Yes, for an accurate "net" ROI, your initial investment figure should include all transaction costs (brokerage, stamp duty, demat charges, etc.), and your final value should be net of exit loads, brokerage on sale, and applicable capital gains tax.
What is considered a "good" ROI in India?
It depends entirely on the asset class and risk taken. As a broad reference: bank FDs currently yield roughly 6-7.5% annually, PPF yields 7.1%, and diversified equity mutual funds have historically delivered 11-12% CAGR over long periods (with significant year-to-year volatility). A "good" ROI should be judged relative to the risk-free rate (government securities/FD) plus a premium for the additional risk taken.