ROI (Return on Investment) Calculator
Calculate your net profit, overall Return on Investment (ROI) percentage, and annualized return rate in seconds.
How it works
Return on Investment (ROI) evaluates the efficiency and profitability of an investment. It measures the net return relative to the initial cost outlay. Factoring in holding time provides an annualized rate useful for comparing different assets.
Formula
ROI = (Revenue - Cost / Cost) × 100%
Net profit divided by initial cost, expressed as a percentage of your original money put to work.
| Symbol | Variable | Unit | Description |
|---|---|---|---|
| ROI | Return on Investment | % | |
| Revenue | Total proceeds / value received | ₹ | |
| Cost | Initial capital cost / investment | ₹ |
Worked example
₹50,000 invested generating ₹85,000 over 3 years
- Initial Cost:
- ₹50,000
- Final Revenue:
- ₹85,000
- Period:
- 3 years
Net Profit = ₹85,000 - ₹50,000 = ₹35,000. Simple ROI = (35,000 / 50,000) × 100 = 70.00%. Annualized ROI = (85,000 / 50,000)^(1/3) - 1 = (1.7)^(0.3333) - 1 ≈ 19.35% p.a.
Limitations
ROI does not evaluate the risk or volatility endured to achieve the return.
Frequently asked questions
What is a good ROI percentage?
A 'good' ROI depends on risk and asset class. In the stock market, 12-15% annualized ROI is strong; in real estate, 8-12% (rental yield + appreciation); for private business ventures, 20%+ is often targeted.
Can ROI be negative?
Yes, if the final value is less than the initial cost, your net profit is negative, resulting in a negative ROI (a loss on investment).
How does ROI differ from profit margin?
Profit margin measures net profit relative to total sales revenue (Profit / Revenue). ROI measures net profit relative to initial money invested (Profit / Cost).
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Last reviewed: 2026-08-22.