What is ROI?
ROI stands for return on investment. It measures how much you gained or lost on an investment compared with what you put in, as a percentage. An ROI of 50% means you made ₹50 of profit for every ₹100 invested; an ROI of −20% means you lost a fifth of your money. Because it is a simple ratio, ROI lets you compare very different uses of money – shares, a rental flat, a marketing campaign, a solar panel, a business project or even a college degree – on the same scale.
In Indian banking, "ROI" is also short for rate of interest on a loan. This page handles both meanings.
What is an ROI calculator?
An ROI calculator is a free online tool that works out your return on investment from two numbers: what you invested and what you got back. Add the holding period and it also gives the annualized ROI – the return per year – which is the fair way to compare investments held for different lengths of time. Switch the mode and it becomes an ROI calculator from EMI, which finds the real rate of interest a lender is charging when you only know the loan amount, EMI and tenure.
How to use the ROI calculator
Return on investment
- Amount invested – everything you paid, including brokerage, stamp duty, registration or setup costs.
- Amount returned – the sale value plus any income received along the way (rent, dividends, interest), minus selling costs and taxes if you want an after-tax ROI.
- Investment period – how many years you held it. Leave 0 if you only want total ROI.
Loan ROI from EMI
- Choose Loan rate of interest (ROI) from EMI.
- Enter the loan amount, the monthly EMI and the number of EMIs.
- The calculator solves for the yearly reducing-balance rate and also shows the equivalent flat rate.
ROI formula
ROI = (Final value − Amount invested) ÷ Amount invested × 100
Annualized ROI = (Final value ÷ Amount invested)1/n − 1
- Final value = everything you received from the investment
- Amount invested = total cost of the investment
- n = number of years held
Annualized ROI is the same as CAGR (compound annual growth rate). For growth between two values over time, you can also use the CAGR calculator.
ROI calculation examples
How to calculate ROI percentage
You invest ₹1,00,000 in shares and sell them three years later for ₹1,50,000. ROI = (1,50,000 − 1,00,000) ÷ 1,00,000 × 100 = 50%. Annualized ROI = (1.5)1/3 − 1 = 14.47% a year. Note that the simple average, 50% ÷ 3 = 16.67%, overstates the yearly return because it ignores compounding.
ROI in real estate
You buy a flat for ₹50 lakh and pay ₹4 lakh in stamp duty and registration, so your cost is ₹54 lakh. Over five years you collect ₹9 lakh of rent after maintenance and sell for ₹65 lakh after brokerage. Final value = ₹74 lakh. ROI = (74 − 54) ÷ 54 = 37.0%, and annualized ROI = (74 ÷ 54)1/5 − 1 = about 6.5% a year – before tax, and lower than it first looks.
ROI for a business or marketing project
A shop spends ₹40,000 on an online ad campaign that brings in ₹1,00,000 of extra gross profit. ROI = (1,00,000 − 40,000) ÷ 40,000 = 150%. Use profit, not revenue, in the "returned" figure, or the ROI will be inflated. To work out profit from sales, see the profit margin calculator.
What is ROI in a loan? Calculate ROI from EMI
When a bank says "ROI 12%", it means the rate of interest. Sometimes you only know the EMI – for example on a consumer durable loan, a "no-cost" EMI offer or an old loan statement. Finding the rate requires solving the EMI formula backwards, which the calculator does for you.
Example: a ₹5,00,000 loan with an EMI of ₹16,607 for 36 months has an ROI of 12.00% a year on a reducing balance. Total interest is ₹97,852. The same interest spread as a flat rate works out to only about 6.52% a year – which is why a low "flat rate" quote can hide a much higher real rate. Once you know the rate, the loan calculator shows the full schedule.
ROI flat vs reducing
A flat ROI charges interest on the full loan for the whole tenure; a reducing ROI charges only on the balance still owed. A reducing rate is always roughly 1.8 to 1.9 times the flat rate for the same EMI on typical tenures. Compare loans on the reducing rate.
What is a good ROI?
It depends on risk and time. As a rough guide for India, compare your annualized ROI with these benchmarks:
| Option | Typical long-run return (per year) |
|---|---|
| Savings account | 2.5%–4% |
| Bank fixed deposit | 6%–7.5% |
| Consumer inflation (long run) | around 5%–6% |
| Diversified equity (long run, volatile) | 10%–13% |
An investment that returns less than inflation loses buying power even if the ROI is positive. Check your real return with the inflation calculator.
Is ROI calculated annually?
Not by default. Plain ROI covers the whole holding period, whether that is three months or ten years. That is its main weakness: a 40% ROI over ten years (3.4% a year) is poor, while 40% over two years (18.3% a year) is excellent. Always look at the annualized ROI when you compare. For investments with many cash flows – such as monthly SIPs – use XIRR instead.
Limits of ROI
- It ignores time unless you annualize it.
- It ignores risk: a 15% ROI on a start-up and on a government bond are not equal.
- It depends on what you count as cost and return. Leave out fees, taxes or your own time and ROI looks better than it is.
ROI in Excel
With cost in A2, final value in B2 and years in C2: ROI =(B2-A2)/A2; annualized ROI =(B2/A2)^(1/C2)-1. For loan ROI from EMI use =RATE(36,-16607,500000)*12, which returns about 12%.
Yearly returns, property, solar and loans: what to enter
- Yearly or monthly return – the annualized figure is the calculator's yearly return on investment. For a monthly figure, use (1 + annual ROI)1/12 − 1.
- Regular contributions or a SIP – plain ROI assumes one investment. For monthly contributions, a SIP or a yearly investment, give the ROI calculator the total invested as the cost for a rough figure, or the compound interest calculator or XIRR for an exact yearly rate.
- Inflation – compare the ROI calculator's annualized figure with inflation to see your real return.
- Real estate – when you use the ROI calculator for a property, include stamp duty, registration and rent, as in the example above.
- Business and solar – for solar panels, cost = installation cost after subsidy, and return = electricity bill savings over the period.
- No download needed – the ROI calculator runs free online, so you do not need a template, an xls sheet or an app. The calculator works in rupees for India and in other currencies.
ROI calculator for loan, home loan, car loan and personal loan
In loan terms, ROI means the rate of interest. Switch to loan mode and enter the amount, EMI and months of a home loan, car loan or personal loan to find the rate you are really paying. Because the ROI here is based on the EMI, the tool is the reverse of the EMI calculator: it solves the EMI formula for the rate. For an ROI comparison of flat vs reducing rates, look at the two rates the calculator shows.
ROI calculator with dates
For an ROI calculator with dates, count the days between purchase and sale and divide by 365 to get years – 18 months is 1.5 years.
How to calculate ROI in years, for a project, and in sales
How to calculate ROI in years (the payback period): cost ÷ yearly profit – a ₹2 lakh machine that saves ₹50,000 a year pays for itself in 4 years. How to calculate ROI for a project: (project benefits − project costs) ÷ project costs. How to calculate ROI in sales, or what is ROI in marketing: (gross profit from the campaign − campaign cost) ÷ campaign cost. How to calculate ROI on investment in shares: include dividends and brokerage.
What is ROI in business and college?
What is ROI in business: the profit a business earns on the money invested in it. What is ROI in college or what is ROI in MBA: the extra lifetime earnings from the degree compared with its total cost, including fees and income given up while studying. How to calculate ROI of college: (expected salary gain over a set number of years − total cost) ÷ total cost. What is ROI in digital marketing: profit driven by ads and campaigns divided by the spend. How do you calculate your ROI in each case? With the same formula – only what counts as cost and return changes.
ROI meaning and ROIC
The ROI calculator meaning: a tool that expresses gain as a percentage of cost. What is ROIC? Return on invested capital – a company-level measure: operating profit after tax ÷ (debt + equity invested).
ROI calculator formula with examples (India and worldwide)
The ROI calculator formula is ROI = (amount returned − amount invested) ÷ amount invested × 100, and the annualized ROI = (amount returned ÷ amount invested)1/years − 1. Here are ROI calculator examples you can check by entering the same numbers above:
| Example | Invested | Returned | Period | Total ROI | ROI per year |
|---|---|---|---|---|---|
| Shares | ₹1,00,000 | ₹1,50,000 | 3 years | 50% | 14.47% |
| Flat bought and sold | ₹40,00,000 | ₹52,00,000 | 5 years | 30% | 5.39% |
| Ad campaign (gross profit from sales) | ₹20,000 | ₹35,000 | 1 month | 75% | – |
ROI calculator India: INR, monthly and yearly ROI
This ROI calculator works in INR (₹) by default, and the formula is the same in any currency, so it serves equally well as an ROI calculator in NZ dollars, US dollars or euros; just keep both amounts in one currency.
ROI calculator India monthly
To turn a yearly ROI into a monthly one, use (1 + yearly ROI)1/12 − 1. The 14.47% yearly ROI in the share example is about 1.13% a month. For a monthly income investment, such as rent of ₹15,000 on a ₹30 lakh flat, the monthly ROI is 15,000 ÷ 30,00,000 = 0.5%, or 6% a year before costs.
ROI calculator India yearly
Enter the period in years and the ROI calculator shows both the total ROI and the annualized ROI per year. Compare the yearly figure with an FD rate (about 6.5–7.5% in India) or your loan rate to judge the investment.
ROI calculator India loan
In India, banks write "ROI" for the loan rate of interest. Choose "Loan rate of interest", enter the loan amount, EMI and months, and the ROI calculator finds the yearly reducing-balance rate, as shown in the loan section above.
ROI calculator for college and education
To use this ROI calculator for college, enter the total cost of the degree (fees, hostel and the salary you give up while studying) as the amount invested and the extra earnings you expect over, say, 10 years as the amount returned. Example: an MBA costs ₹25 lakh in total and raises your pay by ₹6 lakh a year; over 10 years that is ₹60 lakh extra, so ROI = (60 − 25) ÷ 25 = 140%, or about 9.1% a year. The estimate is rough, because future salary is uncertain.
ROI kaise calculate kare? (step by step)
- Kitna lagaya: add up everything you invested, including charges.
- Kitna mila: add the sale value and any income received.
- Profit = mila − lagaya.
- ROI % = profit ÷ lagaya × 100. ₹1 lakh lagakar ₹1.5 lakh mile, to ROI 50% hai.
Frequently asked questions
How do you calculate ROI?
ROI = (final value − amount invested) ÷ amount invested × 100. Investing ₹1 lakh and getting back ₹1.5 lakh is an ROI of 50%.
How do I calculate ROI per year?
Use annualized ROI = (final value ÷ investment)^(1/years) − 1. A 50% gain over 3 years is 14.47% a year.
What is ROI in a loan?
In loans ROI means rate of interest. You can find it from the EMI: a ₹5 lakh loan with an EMI of ₹16,607 for 36 months carries an ROI of 12% a year.
What is the full form of ROI?
ROI stands for return on investment. In Indian banking it is also used for rate of interest.
Can ROI be negative?
Yes. If you get back less than you invested, ROI is negative. Investing ₹1 lakh and getting ₹80,000 back is an ROI of −20%.
What is the difference between ROI and CAGR?
ROI is the total return over the whole period. CAGR, or annualized ROI, spreads that return into a steady yearly rate.
How do you calculate ROI in real estate?
Add the sale price and net rent received, subtract the full purchase cost including stamp duty and registration, then divide by that cost.
What is the ROI calculator formula?
ROI = (amount returned − amount invested) ÷ amount invested × 100. Annualized ROI = (returned ÷ invested)^(1/years) − 1.
How do I calculate monthly ROI?
Monthly ROI = (1 + yearly ROI)^(1/12) − 1. A 12% yearly ROI is about 0.95% a month.
How do I calculate the ROI of a college degree?
Divide the extra earnings you expect from the degree, minus its total cost, by the total cost. Count fees, living costs and the salary you give up while studying as the cost.
Last updated 2026-09-18