ROI Calculator
Quick answer: Return on investment (ROI) is the profit from an investment divided by its cost, shown as a percentage. If you put in ₹2,00,000 and it grows to ₹2,50,000, your ROI is 25%. Enter the starting value, ending value and time held to get ROI and annualised ROI.
Use the ROI Calculator
ROI formula and what each symbol means
ROI (%) = (Final value − Initial cost) ÷ Initial cost × 100. Annualised ROI (%) = ((Final ÷ Initial)^(1 ÷ years) − 1) × 100.
| Symbol | Meaning |
|---|---|
| Initial cost | Total money put in, including fees |
| Final value | What you get back, including income received |
| years | Holding period in years |
ROI examples
India
You invest ₹2,00,000 and sell for ₹2,50,000 after 3 years. ROI = (2,50,000 − 2,00,000) ÷ 2,00,000 = 25%. Annualised ROI = (1.25^(1/3) − 1) = about 7.72% a year.
US
You spend $8,000 on equipment and it earns $10,000 in extra profit over 2 years. ROI = 25%. Annualised = (1.25^(1/2) − 1) = about 11.8% a year.
How to calculate ROI step by step
- Add every cost, including fees and taxes you paid.
- Add the final value plus any income you received.
- Subtract cost from final value to get net gain.
- Divide net gain by cost and multiply by 100.
- Use annualised ROI to compare investments held for different lengths of time.
How to read your ROI result
Compare ROI only against other options held for the same time. A 25% ROI over 3 years is about 7.7% a year, which may be below a fixed deposit or index fund return after tax.
Common mistakes when calculating ROI
- Ignoring fees, brokerage and taxes in the cost.
- Comparing ROI across different time periods without annualising.
- Leaving out dividends or interest received.
ROI FAQ
What is a good ROI?
It depends on risk and time. Compare annualised ROI with a risk-free option such as a bank fixed deposit and with a broad market index. Returns well above both are good only if the risk matches.
How do I calculate ROI in Excel?
Use =(Final − Initial)/Initial and format the cell as a percentage. For annualised ROI use =(Final/Initial)^(1/Years)−1.
What is the difference between ROI and annualised ROI?
ROI shows total gain over the whole period. Annualised ROI converts it to a yearly rate so investments held for different periods can be compared fairly.
Can ROI be negative?
Yes. If the final value is below the cost, ROI is negative and shows the percentage lost.
Method, review and disclaimer
Edited by: Hemant Kumar and Anjita Rai, founders of ToolsVault (SEO and content professional, not a licensed adviser). Method: this tool runs in your browser using the formula shown on this page; the numbers you enter are not sent to our servers.
Disclaimer: For information only. This is not financial advice.