ROI Calculator

Calculate return on investment as a percentage and annual rate of return.

Investment Details

1 yr30 yrs
Formula: ROI = (Net Profit / Cost) × 100
ROI = (35,000 / 1,00,000) × 100 = 35%

Return on Investment

+35%

Net Profit / Loss

+₹35,000

Annualized ROI (CAGR)

10.52%/yr

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ROI Calculator Formula & How It Works

ROI = (Net Return ÷ Cost of Investment) × 100% | Annual ROI = [(1 + ROI)^(1/t) − 1] × 100%
  • Net Return = Final Value − Initial Investment
  • Cost = Initial investment amount
  • t = Holding period in years (for annualising)
  • Annualised ROI accounts for the compounding effect of time

ROI measures profitability as a percentage of the cost. To compare investments held for different periods, use annualised ROI (CAGR): Annual ROI = (1 + ROI)^(1/t) − 1. A 100% ROI over 5 years is only a 14.9% annual return, not 20%.

ROI Calculator FAQs

What is a good ROI for an investment?

Benchmarks: stock market average ~10%/year, real estate ~8–12%/year total return, business investments typically target 15–30%/year. 'Good' ROI is relative to risk — a riskier investment should offer higher potential ROI.

How is ROI different from rate of return?

Basic ROI doesn't account for time. A 50% ROI in 1 year vs 5 years are very different. Rate of Return (or CAGR) annualises ROI for apples-to-apples comparison. Always compare investments using annualised returns.

Can ROI be negative?

Yes. Negative ROI means you lost money. ROI = (Gain − Cost) / Cost. If you invested $1,000 and got back $800, ROI = (800 − 1000) / 1000 = −20%. Negative ROI is a loss.

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