ROI
🆓 Free
Annualised ROI
ROI Calculator
Enter investment cost and returns to instantly calculate ROI, annualised ROI (CAGR), payback period, and net profit. The Compare tab lets you put multiple investments side by side on a common CAGR basis - so you're not comparing a 1-year return against a 5-year return unfairly. Includes marketing ROI and ROAS calculator.
ROI Calculator
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ROI
⚖️ Compare Investments
Add investments to compare ROI, profit and payback side by side.
Investment
Cost (₹)
Return (₹)
📢 Marketing ROI Calculator
Calculate return on your marketing campaigns.
ROI Formulas
Basic ROI
ROI % = (Net Profit / Investment Cost) × 100
= (Return - Cost) / Cost × 100
Example: Invest ₹1,00,000, get back ₹1,45,000
Net Profit = 1,45,000 - 1,00,000 = ₹45,000
ROI = 45,000 / 1,00,000 × 100 = 45%
Annualised ROI (CAGR)
Annualised ROI = ((Final Value / Initial Value)^(1/Years) - 1) × 100
Example: ₹1,00,000 ₹1,61,000 over 3 years
= ((1,61,000 / 1,00,000)^(1/3) - 1) × 100
= (1.61^0.333 - 1) × 100
= (1.172 - 1) × 100
= 17.2% per year
This is the Compound Annual Growth Rate (CAGR).
Better than simple ROI for comparing investments
of different durations.
Payback Period
Payback Period = Initial Investment / Annual Cash Flow
Example: ₹5,00,000 investment, ₹1,20,000/year return
Payback = 5,00,000 / 1,20,000 = 4.17 years
Total ROI over 10 years:
Total Return = 1,20,000 × 10 = ₹12,00,000
Net Profit = 12,00,000 - 5,00,000 = ₹7,00,000
ROI = 7,00,000 / 5,00,000 × 100 = 140%
Marketing ROI (ROAS vs ROI)
ROAS (Return on Ad Spend) = Revenue / Ad Spend
A ROAS of 3.6× means ₹3.60 revenue per ₹1 ad spend
Marketing ROI = (Revenue × Gross Margin - Ad Spend)
/ Ad Spend × 100
Example: ₹50,000 spend, ₹1,80,000 revenue, 40% margin
Gross Profit = 1,80,000 × 0.40 = ₹72,000
Net Profit = 72,000 - 50,000 = ₹22,000
Marketing ROI = 22,000 / 50,000 × 100 = 44%
Frequently Asked Questions
ROI (Return on Investment) measures profitability relative to cost. Formula: ROI% = (Net Profit ÷ Investment Cost) × 100. Net Profit = Total Returns − Investment Cost. Example: invest ₹1,00,000, receive ₹1,45,000 back. Net Profit = ₹45,000. ROI = 45,000 ÷ 1,00,000 × 100 = 45%. Basic ROI does not account for time - a 45% ROI over 5 years is far worse than 45% over 1 year. Use annualised ROI (CAGR) to compare investments of different durations.
Annualised ROI, also called CAGR (Compound Annual Growth Rate), adjusts for the holding period. Formula: (Final Value ÷ Initial Value)^(1÷Years) − 1. Example: ₹1,00,000 → ₹2,00,000 over 5 years = (2.0)^(1/5) − 1 = 14.87% per year. Why it matters: a 100% total ROI over 10 years is only 7.2% CAGR - mediocre. The same 100% ROI over 2 years is 41.4% CAGR - excellent. Always convert to CAGR before comparing investments.
Good ROI benchmarks depend on risk level: Bank FD: 6.5–7.5% (risk-free). PPF: 7.1% tax-free. Gold: approximately 8–10% CAGR long-term. Real estate India: 8–14% CAGR. Nifty 50 index fund: approximately 12–14% CAGR long-term. Business investment: 15–25%+ to justify risk and management time. Marketing campaigns: ROI above 300% (ROAS 4:1+). Any investment must beat the risk-free rate (FD) to justify the extra risk. Higher return potential always comes with higher risk.
ROAS (Return on Ad Spend) = Revenue ÷ Ad Spend. A ROAS of 4 means ₹4 revenue per ₹1 spent. Marketing ROI adjusts for your gross margin: ROI = (Revenue × Gross Margin% − Ad Spend) ÷ Ad Spend × 100. Example: ₹50,000 spend, ₹2,00,000 revenue, 35% margin. ROAS = 4.0. Marketing ROI = (2,00,000 × 0.35 − 50,000) ÷ 50,000 × 100 = 40%. ROAS ignores margins - a 4× ROAS at 15% margin loses money. Always use marketing ROI for true campaign profitability.
Payback period is the time to recover your initial investment from cash flows. Formula: Investment ÷ Annual Cash Flow. Example: ₹5,00,000 investment generating ₹1,20,000/year: Payback = 5,00,000 ÷ 1,20,000 = 4.17 years. Simple payback ignores time value of money - a discounted payback period adjusts for this and is more accurate. Shorter payback = lower risk. Most businesses target payback within 3–5 years, though high-return, high-risk opportunities can justify longer payback periods.
ROI measures total return as a % of cost, ignoring the time value of money. IRR (Internal Rate of Return) is the discount rate that makes NPV of all cash flows = 0 - it accounts for the timing of each cash flow. Earlier returns are more valuable because money can be reinvested sooner. For simple one-time investments (buy and hold, then sell): ROI and CAGR are sufficient. For complex multi-year projects with annual cash flows (rental property, business with yearly profits): IRR gives a more accurate picture.
Always use CAGR for duration-adjusted comparison. Beyond CAGR, also consider: (1) Risk - higher CAGR usually means higher risk; a 7% PPF may be better than a 12% debt fund for risk-averse investors. (2) Taxes - FD interest taxed at slab rate; LTCG on equity at 10% above ₹1.25L; PPF interest tax-free. (3) Liquidity - FDs are liquid; real estate is not. (4) Transaction costs - real estate has significant buy/sell costs. (5) Opportunity cost - the CAGR of your next best alternative. Risk-adjusted, after-tax, after-cost CAGR is the true comparison metric.
Yes - if you receive back less than you invested, ROI is negative. Example: invest ₹1,00,000, recover ₹80,000. ROI = (80,000 − 1,00,000) ÷ 1,00,000 × 100 = −20%. A negative ROI means the investment destroyed value. For marketing: an ROI of −30% means ad spend cost more in margin than it generated. Analyse the cause before investing further: wrong audience, pricing issue, product-market fit problem, or incorrect attribution of returns to this investment.
ROI Calculator - Understanding Return on Investment, CAGR and Payback Period
ROI is the most fundamental measure of investment performance - but using it correctly requires understanding its limitations. The basic formula (Net Profit ÷ Cost × 100) is simple, but comparing a 50% ROI over 5 years against a 30% ROI over 1 year is meaningless without annualisation. This calculator handles both the basic and annualised calculations, and puts multiple investments on a comparable CAGR basis.
ROI vs CAGR - the critical difference: Investment A: ₹1L ₹1.5L in 1 year = 50% ROI = 50% CAGR. Investment B: ₹1L ₹2.5L in 5 years = 150% ROI = 20.1% CAGR. Investment A looks better at 50% ROI vs 150% ROI. But annualised, A is a much stronger investment at 50% per year vs 20% per year. Always compare using CAGR.
ROI, CAGR, IRR - Three Metrics for Different Situations
ROI and CAGR
- Basic ROI: (Returns − Cost) ÷ Cost × 100. Simple, ignores time. Good for single-period comparisons at the same duration.
- CAGR (Annualised ROI): (Final÷Initial)^(1÷Years) − 1. Accounts for time. Best for comparing any two investments with different holding periods.
- Both assume money in and out at fixed points. Neither accounts for cash flows during the period.
IRR - For Complex Cash Flows
- IRR (Internal Rate of Return): the discount rate that makes NPV of all cash flows = 0
- Accounts for the timing of each cash flow - earlier returns are worth more
- Use for: multi-year projects with varied annual returns, real estate with ongoing rental income, private equity
- For simple buy-and-hold investments: CAGR is sufficient and easier to interpret
ROI Benchmarks by Investment Type (India)
Understanding what constitutes a good ROI requires context - different asset classes carry different risks and require different minimum returns:
- Bank FD: 6.5–7.5% p.a. Risk-free (DICGC insured). This is your floor - any investment should beat this to justify the additional risk.
- PPF: 7.1% p.a. Tax-free. Effective post-tax return beats most FDs for taxpayers in 20–30% bracket.
- Debt mutual funds: 6–8% p.a. (varies by fund). Short-to-medium term, lower risk.
- Gold: Approximately 8–10% CAGR in India over the last 20 years. Inflation hedge, but high volatility year-to-year.
- Real estate: 8–14% CAGR including appreciation and rental yield. Location-dependent, illiquid.
- Nifty 50 index funds: ~12–14% CAGR over 10–20 year horizons. Higher risk, highest long-term return for most retail investors.
- Business investment: Minimum hurdle rate of 15–25% to justify the risk, capital deployment, and management time involved.
Marketing ROI vs ROAS - An Important Distinction
For marketing campaigns, two related but different metrics are commonly used:
- ROAS (Return on Ad Spend): Revenue ÷ Ad Spend. A ROAS of 4 means ₹4 revenue for every ₹1 spent. Simple but ignores profit margins - ₹4 revenue at 20% margin is very different from ₹4 revenue at 60% margin.
- Marketing ROI: (Revenue × Gross Margin% − Ad Spend) ÷ Ad Spend × 100. Accounts for margin, giving the true profitability of the campaign. A 300% marketing ROI means ₹3 net profit per ₹1 spent.
Example: ₹50,000 ad spend generating ₹2,00,000 revenue at 35% gross margin. ROAS = 4.0. Marketing ROI = (2,00,000 × 0.35 − 50,000) ÷ 50,000 × 100 = 40%. A 4× ROAS sounds excellent; the true ROI of 40% on the ad spend is still good but tells a different story. Always use marketing ROI - not just ROAS - to evaluate campaign profitability.
How this calculator works, and where the numbers come from
The ROI Calculator applies the standard formula for this calculation to the values you enter and updates the result as you type. The calculation itself happens in your browser, and the page explains the method so you can check any result by hand.
Please note: Results are estimates based on the numbers you enter, not accounting or financial advice.
Sources and further reading
Learn more
Read our guide: Compound Interest and the Rule of 72, Checked Against the Math