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ROI Calculator – Return on Investment
Calculate your Return on Investment (ROI) quickly with our free calculator. ROI is the most widely used profitability metric, measuring the efficiency of an investment relative to its cost. Whether you are evaluating a business venture, stock investment, real estate deal, or marketing campaign, this tool gives you instant results showing ROI percentage, total profit, and annualised returns. Compare multiple investment opportunities and make informed financial decisions. Our calculator also supports multi-year investments with annualised ROI calculations, helping you compare investments of different durations on an equal basis.
What is ROI?
ROI stands for Return on Investment. It is a financial metric used to measure the profitability of an investment. ROI helps investors understand how much profit or loss they have generated compared to the amount they initially invested.
ROI shows how much money you gained or lost from an investment relative to its cost.
Example: If you invest ₹50,000 in a business project and earn ₹60,000 after one year, your profit is ₹10,000.
- Business investments
- Real estate investments
- Stock market investments
- Marketing campaigns
- Startup funding decisions
When is ROI Used?
ROI is used whenever someone wants to measure the success or profitability of an investment.
- Evaluating business projects
- Comparing investment opportunities
- Measuring marketing campaign performance
- Analyzing stock investments
- Assessing real estate investments
Businesses use ROI to decide whether a project is worth investing in.
Typical ROI Expectations by Investment Type
| Investment Type | Typical ROI |
|---|---|
| Stock Market | 10–15% |
| Mutual Funds | 10–12% |
| Real Estate | 8–12% |
| Business Investments | 15–25% |
| Savings Accounts | 3–4% |
ROI Formula
ROI (%) = (Net Profit / Investment Cost) × 100
Where Net Profit equals final value minus initial investment cost.
Real ROI Example
Initial Investment = ₹1,00,000
Final Value = ₹1,20,000
Profit = ₹20,000
ROI = 20%
Who Should Use an ROI Calculator?
- Investors
- Business owners
- Startup founders
- Marketing professionals
- Financial planners
- Real estate investors
Benefits of Calculating ROI
- Measure investment performance
- Compare multiple investment opportunities
- Evaluate marketing campaign success
- Assess project profitability
- Improve financial decision making
Common ROI Calculation Mistakes
- Ignoring operating costs
- Not accounting for taxes
- Ignoring time duration of investment
- Excluding maintenance expenses
- Overestimating expected profits
How to Use This ROI Calculator
- Enter the initial investment amount (cost).
- Enter the final value or total returns received.
- Optionally enter the investment duration in years for annualised ROI.
- View the ROI percentage, profit, and annualised return with visual breakdown.
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Frequently Asked Questions
What is ROI?
ROI (Return on Investment) is a financial metric that measures the profitability of an investment as a percentage of the original cost. A positive ROI means the investment gained value; negative ROI means a loss.
What is a good ROI?
A "good" ROI depends on the context. Stock market historically returns 7-10% annually. Real estate averages 8-12%. Business investments often target 15-25% ROI. Always compare against alternative investments and account for risk.
What is annualised ROI?
Annualised ROI converts total ROI into a yearly equivalent, allowing fair comparison between investments held for different periods. A 50% ROI over 5 years (8.45% annualised) is different from 50% over 2 years (22.5% annualised).
Does ROI account for risk?
No, basic ROI does not factor in risk. Two investments may have the same ROI but vastly different risk profiles. For risk-adjusted returns, metrics like Sharpe Ratio, Sortino Ratio, or Risk-Adjusted ROI are more appropriate.
How is ROI used in business decisions?
Businesses use ROI to evaluate marketing campaigns, capital expenditures, hiring decisions, and technology investments. Projects with higher ROI are typically prioritised. ROI helps allocate limited resources to the most profitable opportunities.
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