What is the ROI?
ROI measures how much you gained relative to what you put in. It is the most universal financial metric — used for shares, property, business projects and marketing spend alike.
Plain ROI ignores time, which is its main weakness. A 50% return over three years and over ten years are wildly different, which is why the annualised figure matters more.
Formula & worked example
Annualised = ((Returned / Invested)1/n − 1) × 100
Worked example: ₹5,00,000 becoming ₹7,50,000 over three years is a 50% ROI, but only 14.47% annualised. Against a 7% alternative (which would give ₹6.13 lakh), you outperformed by about ₹1.37 lakh.
How to use this roi calculator
- Enter what you invested in total, including all costs.
- Enter what you got back, net of exit costs and taxes if you want the real figure.
- Set the holding period in years.
- Use the alternative return to compare against an FD, index fund or your loan rate.
Smart tips
- Always compare annualised returns, never absolute ones, across different time periods.
- Include every cost — brokerage, stamp duty, maintenance and tax — or ROI will be flattering and wrong.
- Compare against your loan rate. If you carry 9% debt, an investment returning 7% is a net loss.
- ROI ignores risk. A 15% return with high volatility is not obviously better than 10% that is guaranteed.
Frequently asked questions
How do I calculate ROI?
Subtract the amount invested from the amount returned, divide by the amount invested, and multiply by 100.
What is a good ROI?
It depends on risk and horizon. Equity over 10+ years averages 11–13% annualised in India; debt gives 6–8%. Judge against a comparable alternative.
What is the difference between ROI and annualised return?
ROI is total gain regardless of time. Annualised return converts it to a per-year rate, making different periods comparable.
Should ROI include taxes?
For a true picture, yes. Post-tax ROI is what you actually keep and is the only fair basis for comparison.
Want the theory behind the numbers? Read our returns guides on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 30 Sep 2026. How we check these numbers.