ROI Calculator
Calculate return on investment, net gain and annualized ROI from your initial and final values.
Formula last reviewed 4 August 2026 · How we verify our calculators
Total ROI
- Net gain
- ₹50,000
- Annualized ROI
- 14.5%
Updates live as you type
Frequently asked questions
ROI = (final value − initial investment) ÷ initial investment × 100. Turning ₹1,00,000 into ₹1,50,000 is a 50% total return.
It is the equivalent yearly return, computed as (final ÷ initial)^(1/years) − 1. A 50% gain over 3 years is about 14.5% per year — far less impressive than 50% sounds.
It lets you compare investments held for different lengths of time on a level footing. A 50% return in one year beats 50% over five years.
No. Basic ROI ignores interim cash flows, taxes and risk. For staggered investments use XIRR, and always weigh returns against the risk taken.
Fifty percent total, fourteen and a half percent a year
An investment of ₹1,00,000 returning ₹1,50,000 after 3 years produces a net gain of ₹50,000 — a total ROI of 50% and an annualised ROI of 14.47%.
Those two percentages describe the same outcome, and only one of them can be compared against anything else.
The two calculations
Total ROI = (final value − initial investment) ÷ initial investment × 100 (1,50,000 − 1,00,000) ÷ 1,00,000 = 50%
Annualised ROI = ((final ÷ initial)^(1 ÷ years) − 1) × 100 (1.5)^(1/3) − 1 = 1.1447 − 1 = 14.47%
Note that 50% over three years is not 16.67% a year. Dividing total return by years ignores compounding and overstates the annual rate — the correct figure is 14.47%, because 1.1447 compounded three times gives 1.5.
Why annualised is the only comparable figure
Total ROI says nothing about time, which makes it useless for comparison. A 50% return over three years and a 50% return over ten are wildly different investments reporting an identical number.
Annualised ROI normalises for duration and is therefore what belongs in any comparison — against other investments, against a benchmark index, or against the alternative of doing nothing.
This is the same quantity as CAGR, and the terms are used interchangeably for a single lump-sum investment.
What a complete ROI includes
The headline number is easy to flatter by leaving costs out. A defensible ROI counts:
All acquisition costs — brokerage, stamp duty, registration, legal fees, GST on services.
Ongoing costs — maintenance, management fees, expense ratios, insurance, property tax.
Exit costs — selling commission, transfer charges, and tax on the gain.
Income received along the way — dividends, rent, interest — added to the return.
A property bought at ₹1,00,000 and sold at ₹1,50,000 that incurred ₹8,000 of stamp duty, ₹15,000 of maintenance and ₹3,000 of selling cost has a real gain of ₹24,000, not ₹50,000 — an annualised ROI closer to 7.4% than 14.47%.
ROI and risk
The measure is silent on risk, which is its chief limitation. A 14.47% annualised return from a government bond and the same from a single small-cap stock are not comparable investments, and no ROI calculation will say so.
Compare any ROI against a risk-free baseline — currently a government security or a bank fixed deposit — and ask whether the excess return justifies the additional risk taken. An investment returning 8% with equity-level volatility is a poor trade regardless of the sign.
Reading the result
The figure is nominal and pre-tax. Two corrections bring it closer to reality:
Tax depends on the asset. Equity held over a year is taxed at 12.5% above the ₹1.25 lakh exemption; property and most other assets at 12.5% after 24 months; and anything short-term at slab or the applicable special rate.
Inflation — a 14.47% nominal return during 6% inflation is a real return of (1.1447 ÷ 1.06) − 1 = 8.0%.
For investments with multiple cash flows — a SIP, staged property payments, or anything with contributions along the way — ROI computed on start and end values is simply wrong. Use XIRR, which accounts for the timing of every flow.
Common mistakes
Dividing total return by years. It overstates the annual rate.
Omitting transaction and holding costs. They can halve a real return.
Comparing total ROI across different durations. Annualise first.
Ignoring risk. ROI says nothing about how the return was earned.
Using ROI for a SIP. Multiple cash flows need XIRR.