ROI Calculator

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ROI Calculator – Calculate Return on Investment

The ROI Calculator helps you calculate the Return on Investment (ROI) by measuring the total profit or loss of an investment relative to its total cost. It is designed for general users and investors who want to understand whether an investment was profitable overall.

This calculator focuses on total return, including any additional costs such as fees or charges. It provides a clear percentage result that is easy to compare across different investments.

Note: ROI is not annualized. It measures total return, not yearly growth.

What Is ROI (Return on Investment)?

ROI, or Return on Investment, is a financial metric that measures the percentage gain or loss on an investment relative to its total cost.

In simple terms, ROI answers:

“How much did I make or lose compared to what I invested?”

ROI is expressed as a percentage and focuses purely on overall profitability, not the time taken to achieve it.

Formula Used in This Calculator

The ROI Calculator uses the standard return on investment formula:

ROI (%) = (Final Value − Total Cost) ÷ Total Cost × 100

Where:

  • Final Value is the value of the investment at exit
  • Total Cost is the initial investment plus any additional costs

This formula calculates total return, not annualized return.

Worked Example

Consider a simple investment scenario:

Example Scenario
  • Initial investment: ₹1,00,000
  • Additional costs: ₹5,000
  • Final value: ₹1,35,000
Step 1: Calculate Total Cost
Total Cost = 1,00,000 + 5,000 = 1,05,000
Step 2: Calculate Net Gain
Net Gain = 1,35,000 − 1,05,000 = 30,000
Step 3: Calculate ROI
ROI = (30,000 ÷ 1,05,000) × 100 = 28.57%
Final Result
This means the investment produced a 28.57% total return.

What This Result Tells You

The ROI result shows whether an investment:

  • Generated a profit
  • Broke even
  • Resulted in a loss

It helps you compare the overall profitability of different investments, regardless of their size.

Limits & Boundaries

This calculator does not account for:

  • How long the investment was held
  • Annualized growth or compounding
  • Market volatility during the investment period

Two investments can have the same ROI but very different holding periods. This is why ROI should not be interpreted as yearly performance.

Frequently Asked Questions

What does ROI measure?▼
ROI measures the total profit or loss of an investment relative to its total cost.
How do you calculate ROI?▼
ROI is calculated by dividing net gain by total cost and multiplying by 100.
Is ROI the same as annual return?▼
No. ROI shows total return and does not account for time.
Can ROI be negative?▼
Yes. If the final value of an investment is lower than the total cost, ROI will be negative, indicating a loss.
Should I include additional costs in ROI?▼
Yes. Including fees and charges gives a more accurate picture of profitability.
Is ROI useful for stock market investments?▼
ROI is useful for evaluating overall outcomes, especially at exit, but it does not show yearly performance.

Optional Context

ROI works best for one-time investments, asset sales, and stock exits where the goal is to assess overall profitability. It is less suitable for comparing long-term investments with different durations.

For understanding annualized growth over time, compare this investment using the CAGR Calculator.