Calculate your total ROI, annualised CAGR, net profit — for stocks, mutual funds, real estate or any investment.
ROI Formula — How It's Calculated
Return on Investment (ROI) is one of the most widely used financial metrics because it is simple, universal, and allows quick comparison between completely different types of investments — from stocks to real estate to a new business machine.
ROI = (Final Value − Initial Investment) ÷ Initial Investment × 100
CAGR = (Final Value ÷ Initial Value)^(1/Years) − 1
Worked example: You invested ₹2,00,000 in a mutual fund 4 years ago. It is now worth ₹3,40,000.
| Net Profit | ₹3,40,000 − ₹2,00,000 = ₹1,40,000 |
| Total ROI | ₹1,40,000 ÷ ₹2,00,000 × 100 = 70% |
| CAGR (Annualised) | (3,40,000 ÷ 2,00,000)^(1/4) − 1 = 14.2% per year |
ROI vs CAGR — What's the Difference?
| Aspect | ROI | CAGR |
|---|
| What it shows | Total % gain over entire period | Equivalent annual % gain |
| Time factor | Ignores how long investment was held | Accounts for time period |
| Best used for | Quick comparison of total gains | Comparing investments of different durations |
| Example (same investment) | 70% ROI over 4 years | 14.2% CAGR per year |
| Limitation | 50% ROI in 1 yr ≠ 50% ROI in 10 yrs | Assumes smooth compounding — actual returns are lumpy |
💡 Which to Use? Use CAGR when comparing investments held for different periods. Use Total ROI when you simply want to know the overall gain percentage. For investments under 1 year, use ROI (CAGR becomes misleading for sub-year periods).
Comparing with other investments
Compare your CAGR with the current rate on a bank FD or small-savings scheme, and remember that market returns are not guaranteed and tax treatment differs by asset. Check the rate offered by your bank or the Government of India small-savings notification for current figures.
ROI Calculator for Real Estate India
Real estate ROI calculation in India must account for several additional costs that significantly reduce actual returns:
| Cost Component | Amount | Effect on ROI |
|---|
| Stamp duty + registration | Set by your state | Reduces starting ROI immediately |
| Brokerage | As agreed | Upfront cost |
| GST (under construction) | Per current GST rules | Adds to total cost |
| Maintenance + society charges | Per your society | Reduces net rental yield |
| Home loan interest (if any) | Per your loan | Must be offset by appreciation + rent |
Use Mode 2 (With Costs) in our calculator above to accurately include all these costs in your real estate ROI calculation.
📈 Calculate SIP Returns for Your Mutual Fund
Find exact CAGR on monthly SIP investments with year-by-year growth chart.
Open SIP Calculator →
ROI Comparison — ₹5 Lakh Invested for 10 Years
This table is only arithmetic. It shows what ₹5,00,000 would grow to at each assumed CAGR over 10 years. The rates are examples, not forecasts or averages for any asset.
| Assumption | CAGR | Value after 10 yrs | Net Profit | ROI |
|---|
| Assumed 7% a year | 7.0% | ₹9.84 L | ₹4.84 L | 96.7% |
| Assumed 10% a year | 10.0% | ₹12.97 L | ₹7.97 L | 159.4% |
| Assumed 13% a year | 13.0% | ₹16.97 L | ₹11.97 L | 239.5% |
| Assumed 16% a year | 16.0% | ₹22.06 L | ₹17.06 L | 341.1% |
⚠️ Past returns do not guarantee future returns. The rates above are assumptions. Actual returns will differ, and market investments can lose value.
Frequently Asked Questions
What is ROI (Return on Investment)?
ROI (Return on Investment) is a percentage that measures how much profit or gain you made relative to your initial investment. Formula: ROI = (Net Profit ÷ Initial Investment) × 100. For example, if you invested ₹1,00,000 and it grew to ₹1,50,000, your ROI is (50,000 ÷ 1,00,000) × 100 = 50%.
What is the difference between ROI and CAGR?
ROI measures total percentage return over the entire period without considering time. CAGR (Compound Annual Growth Rate) is the annualised ROI — it shows the steady rate at which an investment would have grown each year. A 70% ROI over 4 years equals 14.47% CAGR. CAGR is better for comparing investments held for different durations.
What is a good ROI in India for investments?
There is no single good ROI. It depends on the asset, the time you hold it, the risk you take and the tax you pay. A useful check is whether your CAGR beats the rate on a safe option such as a bank FD or PPF, and whether it beats inflation, after tax.
How is ROI different from profit percentage?
Investment ROI uses initial investment as the base: ROI = (Final Value - Total Cost) ÷ Total Cost × 100. Business profit percentage on sales uses revenue as base: Profit % = (Net Profit ÷ Revenue) × 100. For investment analysis, always use initial investment as the denominator.
What is a realistic ROI expectation for Indian stock market?
Equity returns are not guaranteed and vary widely by period and by stock. Short-term returns can be very volatile, so use your own assumptions and look at actual index or fund factsheets rather than a single average.
How do I calculate ROI for real estate in India?
Real estate ROI must include all costs: ROI = (Current Value + Rental Income - Purchase Price - Stamp Duty - Registration - Brokerage - Renovation) ÷ (Purchase Price + All Costs) × 100. Use our "With Costs" mode for accurate real estate ROI calculation including stamp duty, GST, and maintenance costs.
Can ROI be negative?
Yes. Negative ROI means you lost money — the final value is less than your total investment. Example: ₹1,00,000 invested, worth ₹75,000 → ROI = -25%. Negative ROI is common in short-term equity investments during bear markets, oversupplied real estate markets, and failed business ventures.
What is the ROI formula for business investment?
Business ROI = (Net Profit ÷ Cost of Investment) × 100, where Net Profit = Total Revenue - Total Operating Costs - Initial Investment. Example: ₹5L investment, ₹9L revenue, ₹2L operating costs → Net Profit = ₹2L → ROI = 2,00,000 ÷ 5,00,000 × 100 = 40%.
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