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Everyday Tools

ROI Calculator

Return on investment (ROI) measures how much you gained or lost compared with what you put in. It works for shares, property, a business purchase, a course, or any spending where you expect a return.

Last reviewed:

₹
₹

Include any income received, such as dividends or rent.

Yr

Fill this to see the yearly (annualised) return.

ROI
50%
Net profit
₹50,000
Annualised ROI
14.47%
  • ROI ignores risk, taxes and the cost of your time. Compare it with alternatives over the same period.

Enter the cost and the final value. If you also enter how long you held the investment, the calculator shows the annualised ROI, which lets you compare investments held for different lengths of time.

How to use this calculator

  1. Enter the amount you invested.
  2. Enter the final value, including any income you received.
  3. Optionally enter the years held.
  4. Read the ROI, the profit or loss and the annualised ROI.

Formula and variables

ROI = (Final value − Cost) ÷ Cost × 100 Annualised ROI = ((Final value ÷ Cost)^(1 ÷ Years) − 1) × 100

  • Cost - total amount invested.
  • Final value - what you got back, including income received.
  • Years - holding period in years.

Worked example

You invest ₹1,00,000 and it is worth ₹1,50,000 after 3 years.

Inputs and results for the worked example
Cost and final value₹1,00,000 and ₹1,50,000
Holding period3 years
ROI50%
Net profit₹50,000
Annualised ROI14.47%
  1. Profit = 1,50,000 − 1,00,000 = ₹50,000, so ROI = 50,000 ÷ 1,00,000 = 50%.
  2. Annualised: 1.5^(1/3) − 1 = 14.47% a year.

What changes the result

  • Holding period. A 50% ROI over 2 years is very different from 50% over 10 years. Use the annualised figure.
  • All costs. Include purchase costs, fees, taxes and maintenance in the cost for a true ROI.
  • Risk. ROI does not show how risky the investment was.

Benefits and practical uses

  • Compare different investments on one measure.
  • See profit as a percentage of cost.
  • Annualise returns for fair comparison.

Assumptions and limitations

  • Final value includes all income received.
  • Taxes and inflation are not deducted.
  • Annualised ROI assumes steady compounding.

Frequently asked questions

What is a good ROI?

It depends on the risk and the period. Compare with alternatives such as fixed deposits and inflation.

What is the ROI formula?

Net profit divided by cost, multiplied by 100.

Why annualise ROI?

So investments held for different periods can be compared on a yearly basis.

Does ROI include dividends or rent?

Include them in the final value to get the total return.

How is ROI different from CAGR?

ROI is the total return. CAGR is the steady yearly rate that produces that return. Annualised ROI here is the same as CAGR.

References

Page last reviewed on . This calculator gives estimates for planning only; it is not financial advice and not an offer from any lender.