ROI Calculator

The ROI Calculator shows your return on investment and annualized growth. It is useful for evaluating investments, comparing opportunities, and understanding how your money grows over time.

ROI Calculator

Currency
$
$
years

What the result means

ROI is the total gain (or loss) as a percentage of your initial investment. The annualized ROI shows the average yearly return, which is more useful for comparing investments held over different periods. A positive ROI means you made money; a negative ROI means you lost money.

How to use this calculator

  1. 1Enter your initial investment amount in rupees.
  2. 2Enter the final value of the investment.
  3. 3Enter the number of years the investment was held.
  4. 4Press Calculate to see your total ROI and annualized return.
  5. 5Compare different investments to see which performs better.

The formula

The calculation uses a standard, verifiable formula. Here it is in its simplest form.

ROI = ((Final value − Initial investment) ÷ Initial investment) × 100 Annualized ROI = ((Final value ÷ Initial investment)^(1/years) − 1) × 100

What each variable means

SymbolNameDescription
IInitial investmentThe amount you invested at the start.
FFinal valueThe current or final value of the investment.
YYearsHow long the investment was held.

Step-by-step example

Example: ₹50,000 invested, grew to ₹75,000 in 5 years

Initial investment:₹50,000Final value:₹75,000Years:5
  1. 1Gain = 75,000 − 50,000 = ₹25,000
  2. 2ROI = (25,000 ÷ 50,000) × 100 = 50%
  3. 3Annualized = ((75,000 ÷ 50,000)^(1/5) − 1) × 100 ≈ 8.4%

Result

50% total ROI, 8.4% annualized

What changes the result

  • ROI does not account for the time value of money — a 50% return over 1 year is very different from 50% over 10 years.
  • Annualized ROI is the better metric for comparing investments of different durations.
  • Taxes, fees, and inflation reduce your real return.

Edge cases to be aware of

Unusual situations handled correctly

  • If the final value equals the initial investment, ROI is 0%.
  • If the final value is less than the initial investment, ROI is negative.
  • The annualized formula requires a positive final value.

Common mistakes

Avoid these errors

  • Comparing total ROI across investments with different time periods.
  • Ignoring taxes, fees, and inflation.
  • Using ROI alone without considering risk.

Assumptions

  • The final value is the total amount you receive.
  • No additional contributions are made during the period.
  • Returns are compounded annually for the annualized figure.

Limitations

  • Does not account for risk, taxes, fees, or inflation.
  • Assumes a single initial investment with no additional contributions.
  • Past performance does not guarantee future results.

Frequently asked questions

What is the difference between ROI and annualized ROI?+
ROI is the total return over the entire period. Annualized ROI is the average yearly return, which lets you compare investments held for different lengths of time on an equal basis.
What is a good ROI?+
A good ROI depends on the investment type and risk. As a general guide, 7–10% annualized is considered good for equity investments, while lower-risk investments may return 4–6%.
Why is annualized ROI important?+
Because a 50% return over 1 year is far better than 50% over 10 years. Annualized ROI normalizes returns to a yearly basis, making different investments comparable.

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