ROI Calculator
Return on investment and annualised return
Understand the result
About the ROI Calculator
What is ROI?
Return on investment (ROI) measures how much you gained or lost compared with what you put in: ROI = (current value − total cost) ÷ total cost × 100. It works for anything — shares, property, a business expansion, a marketing campaign — as long as you count all the costs.
This ROI calculator works out the total return, the net gain and the money multiple, and — because ROI ignores time — also the annualised return (CAGR) so you can compare investments held for different periods.
How this calculator works
ROI measures how much you made relative to what you put in. It is deliberately simple — gain divided by cost — which makes it easy to compare across very different investments, from a property to a marketing campaign.
Its weakness is that it ignores time. Doubling your money in two years and in twenty are both 100% ROI. That is why the annualised return matters: it converts the total gain into a per-year rate you can compare with a fixed deposit or an index fund.
Formula
ROI = (final value − total cost) ÷ total cost × 100 Total cost = amount invested + additional costs Annualised = (final value ÷ total cost)^(1 ÷ years) − 1
Worked example
- ₹5,00,000 invested, worth ₹8,50,000 after 4 years, with no extra costs.
- ROI = (8,50,000 − 5,00,000) ÷ 5,00,000 = 70%.
- Annualised = (8.5 ÷ 5)^(1/4) − 1 = about 14.2% a year.
Why the time period matters
| Held for | Total ROI | Annualised return |
|---|---|---|
| 2 years | 70% | 30.4% |
| 4 years | 70% | 14.2% |
| 7 years | 70% | 7.9% |
A 70% return is excellent over two years and mediocre over seven — below what a fixed deposit might have earned. Always look at the annualised figure alongside ROI.
Costs people forget to include
- Property: stamp duty, registration, brokerage, interiors, maintenance and property tax.
- Shares and funds: brokerage, STT, exit loads and capital gains tax.
- Business projects: staff time, overheads and the opportunity cost of the money.
- Income received along the way — rent, dividends, interest — should be added to the current value.
Assumptions & important notes
What this calculator assumes
- All costs are entered up front. Costs incurred later in the holding period slightly overstate the annualised figure.
- No interim income such as dividends or rent is counted — add it to the final value if you want the total return.
- Tax is not deducted. Post-tax ROI can be materially lower.
Frequently asked questions
Is a higher ROI always better?
Not on its own. Compare annualised returns, and factor in risk and liquidity. A 40% ROI over ten years is under 3.5% a year — less than a fixed deposit.
Should I include brokerage and taxes?
Include every cost you actually paid in “additional costs” for a realistic figure. Ignoring them can flatter a return by a surprising margin on short holdings.
What is the difference between ROI and CAGR?
ROI is the total percentage gain over the whole period. CAGR spreads that gain evenly across the years to give an annual rate, which is what lets you compare investments held for different lengths of time.
What is a good ROI?
It depends on the risk and the time taken. Compare the annualised return with a safe alternative such as a fixed deposit, and with inflation; a riskier investment should earn noticeably more to be worthwhile.
PaiseWise runs entirely in your browser — the figures you enter are never sent anywhere. Results are estimates for planning only, not financial, tax or investment advice.