ROI Calculator
Return on investment measures how much you have gained relative to what you put in, expressed as a percentage. On its own, though, ROI hides the effect of time — a 50% gain means very different things over one year versus ten. This calculator shows both the absolute ROI and the annualised rate, so you can compare investments of different durations fairly and see the yearly growth behind a headline percentage.
Return on Investment
50.00%
Absolute Gain
₹50,000
Annualised (CAGR)
14.47%
Return normalised to a per-year rate.
About the ROI Calculator
An ROI calculator works out the total percentage return on an investment and, given the holding period, the annualised return that spreads that gain across the years. The absolute figure captures the whole-period result, while the annualised figure makes different investments comparable.
Why it is useful
A big-sounding ROI can be unimpressive once you factor in how long it took to earn. Converting it to an annual rate lets you line up a property held for a decade against a stock held for two years, or against a fixed deposit, on equal terms — which is essential for any sensible comparison.
How the calculation works
Absolute ROI = (Final Value − Initial Value) ÷ Initial Value × 100. To annualise it over the holding period, the calculator uses the CAGR formula: Annualised Return = (Final Value ÷ Initial Value)^(1 ÷ years) − 1. This shows the steady yearly rate that would turn the initial value into the final value over the same time.
Key inputs explained
- Initial investment: The amount you originally put in.
- Final value: What the investment is worth now or when sold.
- Holding period: The number of years held, needed to annualise the return.
Example calculation
Inputs
- Initial value
- ₹2,00,000
- Final value
- ₹3,00,000
- Holding period
- 5 years
Calculation breakdown
- Absolute ROI
- (3,00,000 − 2,00,000) ÷ 2,00,000 × 100 = 50%
- Annualised
- (3,00,000 ÷ 2,00,000)^(1 ÷ 5) − 1
- (1.5)^0.2 − 1
- ≈ 0.0845
The ₹1,00,000 gain is a 50% absolute return, which sounds strong until you spread it over five years. The annualised rate is only about 8.4% a year, roughly what a balanced fund might deliver — a reminder that ROI without a time frame can be misleading.
Benefits
- Shows both the total gain and the yearly rate in one place.
- Makes investments of different durations directly comparable.
- Works for any asset — stocks, funds, property or a business.
Limitations
- Ignores risk, so a volatile and a stable investment can show the same ROI.
- Does not account for additional cash flows during the holding period.
- Excludes taxes, charges and inflation that reduce the real return.
Tips
- Always look at the annualised rate, not just the headline ROI.
- Compare the annualised return against inflation to judge real gains.
- Use XIRR instead when there are multiple investments or withdrawals.
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About this calculator
The ROI Calculator is built and maintained by the PaisaBot team. All calculations run instantly in your browser using established financial formulas, and we use high-precision arithmetic to keep the results reliable.
Data accuracy: Interest rates, tax slabs, and scheme rules are updated periodically, but figures can change with RBI, government, and lender revisions. Always confirm the latest rates with your bank or an official source before acting.
Educational purpose: This tool is provided for general information and financial education only. It does not constitute investment, tax, or legal advice. For decisions specific to your situation, please consult a qualified financial advisor.