ROI Calculator
Calculate your return on investment, and see it annualized to compare across different time periods.
Net Gain
₹5,20,000.00
ROI
216.67%
Annualized ROI
25.93%
How to use this calculator
Enter what you invested, what it’s worth now (or what you sold it for), and how long you held it, then click Calculate ROI. The results show your net gain, total ROI, and annualized ROI side by side.
How ROI is calculated
Total ROI is (Final Value − Investment) ÷ Investment × 100. It says how much you made relative to what you put in, but not how long it took. Annualized ROI is ((Final Value ÷ Investment)^(1 ÷ Years) − 1) × 100: the steady yearly growth rate that would turn the investment into the final value over the same period, as if it were a deposit compounding once a year.
Worked example: what goes into "Final Value" for a machine
The calculator opens on the espresso machine from the ROI, payback and depreciation guide: a café pays ₹2,40,000, the machine adds ₹12,000 a month in profit, and it is sold for about ₹40,000 after 5 years. A machine has no price ticker, so the final value is everything it returned: 60 × ₹12,000 = ₹7,20,000 of profit plus ₹40,000 from the sale, ₹7,60,000. With those defaults the calculator shows a net gain of ₹5,20,000, an ROI of 216.67% and an annualized ROI of 25.93%.
Two easy mistakes change the answer:
- Leaving out the resale. A final value of ₹7,20,000 gives 200% and 24.57% a year. Small here, but on a vehicle or property the resale can be most of the return.
- Using extra sales instead of extra profit. The ₹12,000 is what is left after beans, milk and power. Entering the extra takings instead would count the cost of every cup as a gain.
Three readings of the same 216.7%
- 216.7% ÷ 5 = 43.3% a year is the reading to avoid. It is a simple average and ignores compounding, so it overstates what a steady yearly rate would have needed to be.
- 25.93% a year, the annualized ROI, is right for something that pays out once at the end, like land or shares you sell. It treats the whole ₹7,60,000 as arriving in year 5.
- 74.3% a year is the internal rate of return (IRR) worked out in the guide for the real timing: ₹12,000 every month from the first month. Money that comes back early can be used again, so the true yearly rate is far higher than 25.93%. This calculator doesn't compute IRR; for an asset that pays back in instalments, treat its annualized figure as a floor.
For comparison, ₹2,40,000 in a deposit at 7% a year, compounded yearly, would be worth about ₹3,36,612 after 5 years. Enter 336612 as the final value and the calculator shows an ROI of 40.26% and an annualized ROI of 7.00%: for a single payout at the end, the annualized ROI and the deposit rate are the same measure. That is the fair way to put the two side by side, and it says nothing about the extra work and risk the machine carries.
Frequently Asked Questions
What counts as a good ROI?
There is no single number. Compare the annualized figure with what the same money would have earned somewhere of similar risk over the same period: a fixed deposit for money you could not afford to lose, an index fund for money you could leave invested. A 12% annualized return on equipment beats a 7% deposit only if the extra effort and risk of the equipment were worth that 5-point gap to you.
Why does annualized ROI matter if I already know the total ROI?
Total ROI alone doesn't tell you whether a return was fast or slow. A 40% ROI sounds identical whether it took 6 months or 6 years, but the annualized figure reveals the difference immediately — roughly 96% a year in the first case versus about 5.8% a year in the second. Use annualized ROI whenever you're comparing investments held for different lengths of time.
Does ROI account for risk?
No — ROI only measures return relative to cost, with no adjustment for how risky or volatile the investment was to get there. Two investments can show the same ROI while one carried far more risk of loss along the way. If you're comparing options, weigh ROI alongside how predictable or volatile each investment actually was.
Should I include fees and taxes in the investment cost?
For an accurate picture, yes. If you paid brokerage fees, transaction costs, or taxes to acquire or exit the investment, add them to the investment cost (or subtract them from the final value) before calculating ROI — otherwise you'll overstate your actual return.
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