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ROI Calculator

Use this ROI calculator to quickly estimate your investment performance, including total gain, ROI percentage, and CAGR.

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ROI Calculator — Measure the True Return on Any Investment, Including CAGR

Return on Investment (ROI) is the most universally used measure of investment profitability — and for good reason. It answers one simple question: for every rupee you put in, how much did you get back (or lose)? This ROI Calculator takes your invested amount, final returned amount, and investment period, and instantly calculates three key metrics: total gain (absolute profit), ROI percentage (total return), and CAGR (annualized compounded return). Together, these three numbers give you a complete picture of how any investment has actually performed.

Use it to evaluate a stock position you're exiting, compare returns across different assets, assess a real estate transaction, or measure the ROI on a business initiative. The calculation is the same regardless of asset class — the formula doesn't care whether it was a mutual fund, a plot of land, or a marketing campaign.

The ROI and CAGR Formulas

ROI (%) = (Amount Returned − Amount Invested) ÷ Amount Invested × 100

CAGR (%) = (Amount Returned ÷ Amount Invested)1/n − 1  (where n = years)

Example: You invested ₹5,00,000 in a small-cap fund. After 6 years, your holding is worth ₹13,50,000.

  • Total Gain = ₹13,50,000 − ₹5,00,000 = ₹8,50,000
  • ROI = ₹8,50,000 ÷ ₹5,00,000 × 100 = 170%
  • CAGR = (13,50,000 ÷ 5,00,000)1/6 − 1 = (2.7)0.1667 − 1 ≈ 18.0% p.a.

The 170% ROI sounds impressive but is hard to contextualize without the CAGR. 18% annualized is clearly strong for a 6-year equity holding — well above typical large-cap benchmarks. Without CAGR, you can't know if 170% over 6 years is better or worse than 100% over 3 years (which would be 26% CAGR — actually much better).

ROI vs CAGR — When to Use Which

ROI and CAGR are complementary, not competing metrics. Use them together:

  • ROI tells you the total percentage gain or loss — useful for understanding the magnitude of return and for quick comparisons when time periods are the same.
  • CAGR tells you the annualized rate — essential for comparing investments held for different durations. A 50% ROI over 2 years (21.9% CAGR) is far better than a 50% ROI over 10 years (4.1% CAGR), even though both show the same ROI headline.

The classic mistake is comparing ROI percentages without normalizing for time. A property that gave 150% ROI over 15 years (CAGR ≈ 6.3%) significantly underperformed an equity mutual fund that gave 100% ROI over 6 years (CAGR ≈ 12.2%) — yet the property's raw ROI looks larger. Always convert to CAGR before comparing across different tenures.

Calculating Net ROI — Accounting for Costs and Taxes

The calculator gives you gross ROI — the unadjusted return based purely on invested and returned amounts. For a complete analysis, you should also calculate your net ROI by adjusting for:

Transaction costs: Brokerage fees, STT (Securities Transaction Tax), GST on brokerage, and exit loads on mutual funds reduce your effective returned amount. For stocks, these are typically 0.1–0.5% per transaction. For real estate, factor in stamp duty, registration, brokerage (1–2%), and property maintenance costs across the holding period.

Capital gains tax: For equity mutual funds and stocks held more than 12 months, LTCG tax applies at 12.5% on gains above ₹1.25 lakh/year. For holdings under 12 months, STCG is 20%. For debt funds and real estate, different rules apply. Calculate post-tax ROI by subtracting your estimated tax liability from the gain before dividing.

Inflation adjustment: Real ROI = (1 + Nominal ROI) ÷ (1 + Inflation)n − 1. At 6% annual inflation, a 12% CAGR investment delivers approximately 5.7% real CAGR — still positive and wealth-creating, but less than the headline suggests. Use real CAGR to understand whether your wealth is genuinely growing or just keeping pace with inflation.

ROI in Business and Marketing Contexts

In a business context, ROI extends beyond financial investments. A ₹5 lakh marketing campaign that generated ₹20 lakh in new revenue has an ROI of (₹20L − ₹5L) ÷ ₹5L × 100 = 300%. A ₹10 lakh equipment upgrade that increased annual profits by ₹2.5 lakh over 5 years has a total return of ₹12.5 lakh on a ₹10 lakh investment — 25% ROI over 5 years, or 4.6% CAGR. These are not stellar numbers for a business investment; ideally you'd want to see ROI that significantly exceeds your cost of capital.

When evaluating business initiatives, also consider payback period — the number of years to recover the initial investment — alongside ROI. A project with 200% ROI over 15 years may be less attractive than one with 80% ROI over 3 years, depending on your business's cash needs and opportunity cost.

Frequently Asked Questions About ROI

Context matters. For equity, benchmarking against Nifty 50 is useful: if Nifty 50 delivered 12% CAGR over your holding period and your investment delivered 10%, your investment underperformed despite a positive ROI. Generally, beating inflation (6%) means positive real returns; beating fixed deposits (6.5–7%) means you've justified equity risk; beating the benchmark index means you've made a genuinely good active investment decision.
Yes. A negative ROI means the amount returned is less than the amount invested — you've lost money on the investment. For example, ₹1 lakh invested, ₹75,000 returned: ROI = (75,000 − 1,00,000) ÷ 1,00,000 × 100 = −25%. This happens with equity investments during bear markets, failed business ventures, or poor-performing assets. A negative ROI in nominal terms is even worse in real terms once inflation is factored in.
ROI alone is time-blind — 100% ROI over 2 years and 100% ROI over 20 years are radically different outcomes. CAGR normalizes for time, letting you compare any investment on an equal footing. Showing both gives you the total return magnitude (ROI) and the annualized compounding rate (CAGR) simultaneously — two different lenses on the same data, both useful for different purposes.
For rental property, total return includes both capital appreciation and rental income. Add total rent received over the holding period to the final sale price to get your "amount returned." Subtract total costs (purchase price + stamp duty + registration + brokerage at purchase + brokerage at sale + maintenance across tenure) to get your net invested amount. The resulting ROI and CAGR reflect the full investment picture, not just capital appreciation.
Yes, in the context of investments, ROI and absolute return are used interchangeably. Both refer to the total percentage gain or loss over the entire holding period, without annualizing. Mutual fund factsheets in India sometimes use "absolute return" for periods under 1 year (since CAGR is only meaningful for multi-year periods) and CAGR for periods of 1 year or more.
Neither ROI nor CAGR is appropriate for SIP investments, because SIPs involve multiple cash flows at different points in time, not a single lump sum. XIRR (Extended Internal Rate of Return) is the correct metric for SIP returns. XIRR accounts for the timing of each instalment and produces an accurate annualized return. Most mutual fund platforms display XIRR for SIP portfolios automatically. Use this ROI Calculator for lump sum investments only.
Convert both to after-tax CAGR and then compare. An FD at 7% interest for a 30% tax bracket investor gives net return of 7% × (1 − 30%) = 4.9% p.a. An equity investment with 14% CAGR gross, taxed at 12.5% LTCG on gains (assuming all gains are LTCG), effectively delivers approximately 12.8% post-tax CAGR. On this basis, equity significantly outperforms even at the lower end of its historical range — but comes with volatility risk that an FD does not carry.