ROI Calculator
Evaluate investment performance, compare returns across options, and understand profitability with AI-powered explanations, premium visualizations, and smart insights.
Investment Details
Extra amount invested each month alongside initial capital
ROI Score
Growth vs Investment
Profit Breakdown
Return Over Time
Year-wise Performance Table
Detailed annual breakdown of investment performance
| Year | Invested | Value | Profit | ROI | CAGR |
|---|
AI Explanation
What your ROI really means
Smart Insights
Explore how changes could affect your returns
Understanding ROI
What is ROI?
Return on Investment (ROI) measures the profitability of an investment relative to its cost. It's expressed as a percentage and helps you evaluate how efficiently your capital is being used. A higher ROI means better investment performance. Calculated as: ROI = (Net Profit / Cost of Investment) × 100.
ROI vs CAGR
ROI shows total return over the entire investment period, while CAGR (Compound Annual Growth Rate) shows the average annual growth rate. CAGR is more useful for comparing investments of different durations because it normalizes the time factor. For example, a 50% ROI over 5 years equals approximately 8.4% CAGR.
Why ROI Matters
ROI helps you compare investment opportunities, track portfolio performance, and make informed decisions. It accounts for all costs and returns, giving you a clear picture of profitability. Smart investors use ROI alongside other metrics like CAGR, risk assessment, and inflation-adjusted returns for a complete analysis.
Good vs Bad ROI Benchmarks
- Below 0%: Loss — investment destroyed value
- 0-6%: Low — may barely beat inflation
- 6-12%: Moderate — decent traditional investment returns
- 12-20%: Good — strong equity-like returns
- 20%+: Excellent — exceptional performance
Frequently Asked Questions
What is a good ROI percentage?
A good ROI depends on the investment type, duration, and risk profile. Generally, 7-10% annual returns are considered good for equity investments. Fixed-income investments typically return 4-8%. Always consider inflation — if ROI is below inflation, your purchasing power is declining.
How is ROI different from profit?
Profit is the absolute rupee amount earned (Final Value - Total Invested). ROI expresses this profit as a percentage of the amount invested, making it easier to compare investments of different sizes. A profit of ₹10,000 on a ₹1,00,000 investment = 10% ROI.
Should I use ROI or CAGR?
Use ROI for a quick snapshot of total returns. Use CAGR to compare investments of different time periods or to understand annualized performance. CAGR is generally more informative for long-term investments because it accounts for the compounding effect over time.
How does inflation affect ROI?
Inflation reduces the real purchasing power of your returns. A 10% ROI with 6% inflation means your real return is only about 4%. Always consider inflation-adjusted returns (real ROI) to understand the true growth of your wealth.
What is the difference between ROI and IRR?
ROI is a simple percentage return over the entire period. IRR (Internal Rate of Return) accounts for the timing of cash flows — when money goes in and comes out. For investments with multiple contributions or withdrawals, IRR is more accurate. For simple lump sum investments, ROI and CAGR are sufficient.
Can ROI be negative?
Yes, a negative ROI means the investment lost money — the final value is less than the total amount invested. This happens when asset prices decline, business ventures fail, or poor investment choices are made. Negative ROI is a clear signal to reassess the investment strategy.