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Investment & Savings

ROI Calculator

Calculate the percentage return on any investment, including annualized ROI.

Investment Details
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₹
Years
Results

Enter investment details and click Calculate ROI

ROI Calculator — Measure and Compare Every Investment's Return

A ROI (Return on Investment) calculator measures the gain or loss from an investment relative to its cost, expressed as a percentage. It is one of the most universally used metrics in finance, applicable to stocks, real estate, business investments, mutual funds, and any scenario where you spend money expecting a financial return. This calculator also computes annualised ROI (CAGR), which is essential for comparing investments held over different time periods.

Here is a practical example: you invested ₹50,000 in a stock two years ago and sold it today for ₹68,000. Your total ROI = (₹68,000 − ₹50,000) ÷ ₹50,000 × 100 = 36%. But this was over 2 years, so the annualised ROI = (1 + 0.36)^(1/2) − 1 = (1.36)^0.5 − 1 = 16.6% per year. Compare this to Nifty 50's historical 12%–13% annualised return — you outperformed the benchmark by approximately 3.6–4.6% annually, an excellent result. Without annualising, you cannot fairly compare this against any other time-period investment.

What is ROI?

Return on Investment (ROI) is a performance metric that measures the gain or loss generated on an investment relative to its cost. Expressed as a percentage, ROI helps compare the efficiency of different investments and evaluate whether an investment decision was profitable.

  • Basic ROI formula: ROI = (Net Profit / Cost of Investment) × 100 — a simple ratio that works across all types of investments, from stocks and real estate to business projects.
  • ROI does not account for time — a 50% ROI over 1 year is far better than 50% over 10 years. Use CAGR (Compound Annual Growth Rate) for time-adjusted comparisons.
  • In business context, ROI is used to evaluate marketing campaigns, equipment purchases, employee training, and capital projects — any investment where returns can be quantified.
  • Limitations of ROI: it ignores risk, time value of money, and opportunity cost. Combine ROI analysis with IRR and payback period for comprehensive investment evaluation.

How to Use This Calculator

  1. Enter the Initial Investment Amount (total cost, e.g., ₹50,000).
  2. Enter the Final Value (current value or sale proceeds, e.g., ₹68,000).
  3. Enter the Investment Duration in years (e.g., 2 years).
  4. Optionally enter any Periodic Income received (dividends, rental income) to include in total return.
  5. Click Calculate to see total ROI, annualised ROI (CAGR), and wealth gain.
  6. Compare the annualised ROI against benchmarks like Nifty 50 (12%–13%) or bank FD (7%) to assess performance.

ROI and Annualised Return Formula

Total ROI = (Current Value − Initial Cost) ÷ Initial Cost × 100
  • Annualised ROI (CAGR) = (1 + ROI/100)^(1/years) − 1
  • Example: Invested ₹50,000, now ₹68,000, held 2 years
  • Total ROI = (68,000 − 50,000) ÷ 50,000 × 100 = 36%
  • Annualised ROI = (1.36)^(1/2) − 1 = 16.6% per year
  • With dividends: If ₹4,000 dividends received over 2 years:
  • Total return = ₹18,000 + ₹4,000 = ₹22,000 | Total ROI = 44% | CAGR = 20%

Key Terms

Total ROI
The complete percentage gain or loss over the entire holding period, regardless of duration. Useful for comparing total return but not for comparing investments held for different periods.
Annualised ROI (CAGR)
The compound annual growth rate — ROI expressed on a per-year basis. Essential for comparing investments held for different durations. A 36% ROI over 2 years (16.6% CAGR) is very different from a 36% ROI over 4 years (8.0% CAGR), even though total ROI looks identical.
Total Return vs Price Return
Price return only measures the change in value (capital gain/loss). Total return includes all income received (dividends, rent, interest) plus price change. Always use total return for complete performance evaluation — the Nifty 50 TRI (Total Return Index) beats the plain Nifty 50 index by approximately 1.5%–2% annually due to dividend reinvestment.
ROI Benchmarks in India
Excellent: above 20% annualised (beats most equity funds), Good: 12%–20% (matches or beats Nifty 50), Average: 7%–12% (beats FD rates), Below Average: below 7% (matches FD rates), Loss: negative ROI. Always compare against a relevant benchmark — an 8% ROI on a real estate investment vs an equity fund's 14% ROI over the same period suggests the real estate underperformed on a pure return basis.

Tips

  • Always use annualised ROI (CAGR) when comparing investments held for different durations — raw ROI is misleading without time context.
  • Include all costs in the initial investment amount: brokerage, STT, registration charges, renovation costs for property, etc. — understating costs overstates ROI.
  • Include all income received (dividends, rental income) in your return calculation for accurate total return measurement.
  • Compare your CAGR against the Nifty 50 TRI as the equity benchmark. If you're consistently below the index, a simple index fund would have served you better.
  • For real estate ROI, calculate both cash-on-cash return (rental income ÷ down payment) and total ROI (including appreciation) to get a complete picture.
  • Adjust for taxes — post-tax ROI is the number that truly matters. LTCG on equity at 10%, STCG at 15%, rental income at slab rate — all reduce your effective ROI.

Frequently Asked Questions

Benchmarks by asset class in India: Bank FD: 6.5%–7.5% (risk-free, taxable). PPF: 7.1% (risk-free, tax-free). Equity mutual funds: 10%–15% CAGR historically (market risk). Nifty 50 index: 12%–13% CAGR over 15–20 years. Real estate: 5%–10% appreciation + 2%–4% rental yield = 7%–14% total return (illiquid, high transaction cost). Gold: 8%–10% CAGR over long periods. A "good" ROI depends on the risk taken — demanding equity-level returns from FD-level risk is unrealistic.

For SIP investments with multiple cash flows, simple ROI is inaccurate because each monthly investment earns returns for a different duration. The correct measure is XIRR (Extended Internal Rate of Return), which accounts for the timing of each investment. Your mutual fund app displays XIRR automatically. For this calculator, you can enter your total invested amount and current portfolio value to get an approximate blended ROI — just note that the annualised figure will be a rough approximation, not a precise XIRR.

Real estate ROI should include all costs: purchase price + stamp duty (5%–7%) + registration (1%) + renovation + brokerage. Initial investment = total all-in cost. Return includes: current market value + total rent received − maintenance costs − property tax − income tax on rent. Divide net return by total initial investment for ROI. Many real estate investors undercount costs and overcount returns, making the actual ROI significantly lower than perceived.

The Nifty 50 index represents the return from India's 50 largest companies — a diversified, low-effort investment available through index mutual funds at 0.1%–0.2% expense ratio. If your active stock picks or equity mutual funds consistently underperform the Nifty 50 TRI over 5–10 years, you're accepting active risk without the reward. SEBI data shows that 70%–80% of active large-cap fund managers underperform the Nifty 50 over 5-year rolling periods, making the benchmark comparison critically important.

Taxes significantly reduce your effective ROI. Equity investments (including equity mutual funds and ETFs): LTCG (held 12+ months) above ₹1 lakh taxed at 10%, STCG (held less than 12 months) at 15%. Debt mutual funds: taxed at slab rate for all holding periods post-April 2023 changes. FD interest: taxed at slab rate. Real estate: LTCG (held 24+ months) at 20% with indexation or 12.5% without. Always calculate post-tax ROI for accurate comparison between different asset classes.

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