ROI Calculator

Last updated: Jul 22, 2026 | Reviewed by Calkulator Team | 2 min read

Investment

Evaluate whether your investment is actually performing

ROI tells you the percentage return on your investment. If you invested ₹1 lakh and the current value is ₹1.8 lakh over 5 years, your ROI is 80% — but the annualized return (CAGR) is only 12.47%. Both numbers matter.

Always look at annualized returns for investments held over 1 year — absolute ROI can be misleading.

tuneInvestment Details
Initial Investment

                        ₹
                        
                    
≈ 1 Lakh
Final Value

                        ₹
                        
                    
≈ 1.8 Lakh
Investment Period
                            
                            Years
                        
1 yr30 yrs
Total ROI
+80.0%
Profitable Investment
Net Profit
₹80,000
Final - Initial
Initial Investment
₹1,00,000
Amount invested
Annualized ROI (CAGR)
12.47% p.a.
Compounded annual return
Investment Multiple
1.80x
Final / Initial
Investment Period
5 Years
Holding duration
ROI
+80%

                                    Initial Investment
                                    ₹1,00,000
                                

                                    Net Gain
                                    ₹80,000
                                
functions ROI FormulaROI % = (Final - Initial) / Initial — 100
CAGR = (Final / Initial)^(1/t) - 1
t = Investment period in years

Live Result Illustration

Visual summary — updates instantly as you enter values above

LIVE

Real-Life Guide to Using the ROI / CAGR Calculator

Return on investment and CAGR. Use the examples and checks below to turn the number into a practical decision.

When this calculator is useful

Useful when comparing two very different investments — say a stock bought for ₹1,00,000 and sold later, versus a piece of jewellery or property — where you want both a simple percentage gain and a proper annualised figure to compare against other options.

For most people, the best way to use the ROI / CAGR Calculator is to try the real case first, then change one input at a time. That makes the trade-off visible. For example, with a loan calculator you can change tenure while keeping the same rate; with an investment calculator you can change return assumption while keeping the same monthly contribution; with a health, education or measurement calculator you can check how much one input changes the final category.

The result should answer a practical question: Can I afford this? How much should I save? Is this score enough? Is this measurement within range? What is the safer or cheaper option? If the output does not answer the decision clearly, adjust the inputs until the scenario matches your real situation.

Real-Life Example

Stock held four years, ROI vs CAGR: An investor buys shares worth ₹1,00,000 and sells the entire holding for ₹1,80,000 exactly four years later.

1ROI = (80,000/1,00,000) × 100 = 80% total gain over the whole period. CAGR = (1,80,000/1,00,000)^(1/4) – 1 ≈ 15.8% per year, which is the number to use when comparing this stock against, say, a fund that returned 60% ROI over just 3 years — that works out to about 17% CAGR, making it the better annual performer despite the lower ROI headline.

2Now change one input, such as rate, time, quantity, unit or score, and compare the new result with the first one.

A bigger ROI number does not automatically mean a better investment once the two are held for different lengths of time — always convert to CAGR before comparing.

Practical Advice

Use the ROI / CAGR Calculator as a planning tool, not just a number generator. Write down the inputs you used, because the final answer is meaningful only when you remember the assumptions behind it.

If the decision affects money, health, tax, safety, academics or legal compliance, keep a second check ready. That second check may be a bank quote, payslip, official rule, prescription, site measurement, mark sheet or invoice.

Common Mistakes

Quoting ROI (a simple percentage gain over the whole period) as if it were an annual rate — an 80% ROI over 4 years is not "80% a year," it works out to roughly 15.8% annualised.
Ignoring the holding period entirely when comparing two investments' ROI, so a 25% ROI earned in 1 year looks worse on paper than an 80% ROI earned over 4 years, when the first is actually the better annual performer.
Forgetting to deduct transaction costs (brokerage, stamp duty, demat charges) from both the buy and sell price before computing ROI, which overstates the real gain.
Not accounting for interim cash flows like dividends received along the way, understating the true return if those are excluded from the input values.
Comparing a pre-tax CAGR figure directly against a bank FD's post-TDS interest rate without putting both on the same tax footing.

How to Interpret Results

Use the ROI percentage for a quick one-time gain check, but rely on the CAGR figure whenever comparing investments held for different lengths of time, since only CAGR annualises the return to a common yearly basis.

A good interpretation looks at both the main result and the supporting values. If a page shows totals, ratios, categories, schedules or warnings, read those together instead of focusing only on the biggest number.

ROI / CAGR Calculator FAQs

Useful answers for interpreting the output, avoiding mistakes and using the result responsibly.

What is the exact difference between ROI and CAGR here?

ROI = (Final Value – Initial Value) / Initial Value × 100, a single total percentage gain regardless of how long it took; CAGR = (Final Value/Initial Value)^(1/number of years) – 1, which spreads that same gain evenly across each year to give an annualised rate.

Which figure should I use when comparing two different investments?

Use CAGR whenever the two investments were held for different periods, since ROI alone does not account for time and can make a long-held investment look artificially more impressive than a shorter, faster-growing one.

Does this calculator account for dividends or interim payouts I received?

Only if you include them in the values you enter — the formula itself only compares the initial and final amounts you provide, so add any dividends or interim cash received to the final value if you want them reflected in the return.

Why is my actual portfolio return different from the CAGR shown here?

This calculator computes a point-to-point CAGR between exactly two values and two dates; if you added or withdrew money at different times in between, that changes the true annualised return, which is better captured by an XIRR calculation instead.

Can ROI or CAGR be negative?

Yes — if the final value is lower than the initial investment, both figures will be negative, correctly showing a loss rather than a gain over the period.

Should I use ROI or CAGR for a holding period of less than one year?

ROI is generally more meaningful for periods under a year, since annualising a short-term return with CAGR can produce an exaggerated headline figure — for example a 5% gain in 2 months annualises to over 30%, which overstates what is realistically repeatable.

Is CAGR the same as the "average annual return" a mutual fund fact sheet shows?

Usually yes for a point-to-point lumpsum figure, but always check whether the fact sheet's number is CAGR or a simple arithmetic average of yearly returns, since the two can differ meaningfully in a volatile investment.

How do I account for tax when comparing ROI/CAGR across different asset types?

Deduct the applicable capital gains tax from the final value for each asset type before entering it — since equity, debt funds, gold, and property are taxed differently in India, comparing pre-tax figures across asset classes can be misleading.

ROI vs CAGR — What's the Difference?

ROI measures total profit as a percentage of the initial investment over the entire holding period. CAGR (annualized ROI) converts that total return into an equivalent annual growth rate — making it easy to compare investments held for different durations.

A 100% ROI over 5 years = 14.87% CAGR, while the same 100% over 10 years = 7.18% CAGR. Always use CAGR to compare investments with different time horizons.

Example Calculation

Scenario: ₹1 lakh invested, grown to ₹1.8 lakh in 5 years

1Net Gain = ₹1,80,000 - ₹1,00,000 = ₹80,000

2ROI = 80,000 / 1,00,000 — 100 = 80%

3CAGR = (1.8)^(1/5) - 1 = 12.47% p.a.

✓ 80% total ROI | 12.47% annual CAGR | 1.8x multiple

Frequently Asked Questions

ROI and CAGR explained for investors

Is a higher ROI always better?

Not necessarily — ROI must be considered alongside the holding period, risk, and liquidity. A 50% ROI sounds great, but if it took 20 years (CAGR of just ~2%), it underperforms a savings account. Always compare annualized CAGR against alternative instruments of similar risk, and ensure ROI is above your inflation rate to represent real wealth creation.

How do I calculate ROI on a rental property?

Total return includes both rental income and capital appreciation. ROI = [(Rental income over period + Capital gain) / Initial investment] — 100. For example, ₹50L invested, ₹6L rent over 3 years, flat worth ₹65L now — total gain is ₹21L on ₹50L = 42% ROI over 3 years, or ~12.4% CAGR. Subtract maintenance, property tax, and loan interest for accurate calculation.

Does this ROI calculator account for taxes and inflation?

This calculator computes nominal (pre-tax, pre-inflation) ROI and CAGR. To estimate real returns, subtract the inflation rate from the CAGR. For tax-adjusted returns, deduct LTCG (12.5% on gains above ₹1.25L for equity held over 1 year) or STCG (20% for equity held under 1 year) from the net profit before computing effective ROI.

Evaluate whether your investment is actually performing

functions ROI Formula