Stax
Tools

ROI Calculator

Calculate Return on Investment percentage and annualised CAGR.

⚠️ Not financial advice. Results are illustrative only and should not be used as the basis for any investment, tax, or financial decision. Consult a qualified financial adviser or chartered accountant before acting on any figure shown.

₹
₹

What ROI tells you — and what it doesn’t

ROI is one of the most widely used financial metrics because it is simple and intuitive. But a raw ROI figure ignores time: a 50% return over 10 years is far less impressive than 50% in 2 years. That is why this calculator also computes the annualised ROI (CAGR) whenever you provide the holding period.

When to use ROI vs CAGR

  • Use ROI when comparing investments held for the same duration, or when time is not a factor (e.g., a single marketing campaign).
  • Use CAGR when comparing investments held for different periods, evaluating mutual fund performance, or setting long-term wealth targets.

Common pitfalls in ROI analysis

  • Ignoring transaction costs — brokerage, taxes, and fees can significantly erode returns, especially on short-term trades.
  • Survivorship bias — successful investments are remembered; failed ones are forgotten, making average reported ROIs misleadingly high.
  • Nominal vs real — always sanity-check nominal returns against inflation to see if purchasing power actually increased.

Common use cases

Investors use this calculator to compare returns across different asset classes — for example, whether a fixed deposit at 7% over 3 years outperforms a mutual fund that grew 28% in the same period (it doesn't: 28% ROI annualises to ~8.6% CAGR). Business owners evaluate marketing spend ROI by entering campaign cost and attributable revenue. Freelancers track the return on purchasing equipment or courses by dividing additional income generated by the upfront cost. Real estate investors calculate ROI on rental properties by combining rental yield with price appreciation over the holding period.

Frequently asked questions

What is ROI?
ROI (Return on Investment) measures the gain or loss generated relative to the amount invested. It is expressed percentage: ROI = (Net Profit ÷ Initial Investment) × 100. A positive ROI means you earned more than you invested; a negative ROI means a loss.
What is the difference between ROI and CAGR?
ROI tells you the total percentage return regardless of how long the investment w. CAGR (Compound Annual Growth Rate) normalises that return into an equivalent annualised rate, making it easy to compare investments held for different time periods.
What is a good ROI?
There is no universal benchmark — it depends heavily on the asset class and risk level. Indian equity indices historically return 12–15% CAGR over long periods. Fixed deposits offer 6–8%. Real estate, business investments, and startups vary widely. Always compare ROI against the opportunity cost of the next best alternative.
How is annualised ROI calculated?
Annualised ROI (CAGR) = (Final Value ÷ Initial Investment)^(1 ÷ Years) − 1. For example, if ₹1,00,000 grew to ₹1,50,000 in 3 years, the CAGR is (1.5)^(1/3) − 1 ≈ 14.47% per year.
Does this calculator account for inflation?
No — the result is nominal ROI. To find the real (inflation-adjusted) ROI, use the formula: Real ROI = ((1 + Nominal ROI) ÷ (1 + Inflation Rate)) − 1. With Indian CPI inflation averaging ~5–6%, a nominal 12% return translates to roughly 5.7–6.6% real return.

Related tools