Calculate the return on investment (ROI) and annualized ROI for any investment or project.
Return on Investment (ROI) is one of the most widely used metrics in business and finance, measuring how efficiently an investment generates profit relative to its cost. It answers the fundamental question: for every rupee invested, how much did I get back? A positive ROI means the investment was profitable, a negative ROI means a loss, and a higher ROI compared to alternatives means the investment was a better use of capital.
This calculator computes both the simple ROI percentage and the annualized ROI (also called CAGR — Compound Annual Growth Rate) when a holding period is provided. The simple ROI formula is: ROI (%) = ((Final Value − Initial Investment) / Initial Investment) × 100. The annualized ROI accounts for how long the investment was held, making it easier to compare investments of different durations on a like-for-like basis.
Simple ROI tells you the total return over the entire period. CAGR tells you the equivalent average annual return, which is more useful for comparing investments held for different durations. An investment that returned 50% ROI in 10 years has a much lower CAGR (≈4.1%) than one that returned 50% in 3 years (≈14.5%), even though the simple ROI is identical. For comparing across asset classes — FDs, mutual funds, stocks, real estate — always compare CAGR rather than simple ROI.
In business contexts, ROI extends beyond financial investments to evaluate the return from any expenditure — marketing campaigns, employee training, software subscriptions, or equipment purchases. A marketing campaign that cost ₹50,000 and generated ₹2,00,000 in additional sales has a 300% ROI, making it straightforward to compare against other uses of that budget and justify the spend to stakeholders with a clear, quantifiable metric.
One important limitation of ROI to keep in mind is that it doesn't account for time risk — two investments with identical ROI percentages are not necessarily equally attractive if one carries significantly more uncertainty or took a decade to achieve while the other delivered results in a year. This is why annualized ROI (CAGR) is always a better comparison metric when durations differ, and why risk-adjusted metrics like the Sharpe ratio are used by professional investors who need a more nuanced view than percentage gain alone can provide.
Return on Investment (ROI) business और finance में सबसे widely used metrics में से एक है, जो यह measure करता है कि कोई investment अपनी cost के relative कितनी efficiently profit generate करता है। यह fundamental सवाल का जवाब देता है: हर invest किए गए rupee के लिए, मुझे कितना वापस मिला? Positive ROI का मतलब investment profitable था, negative ROI का मतलब loss है, और alternatives की तुलना में higher ROI का मतलब investment capital का बेहतर उपयोग था।
यह calculator simple ROI percentage और holding period दिए जाने पर annualized ROI (CAGR — Compound Annual Growth Rate भी कहते हैं) दोनों compute करता है। Simple ROI formula है: ROI (%) = ((Final Value − Initial Investment) / Initial Investment) × 100। Annualized ROI यह account करता है कि investment कितने समय तक hold किया गया, जिससे अलग-अलग durations के investments की like-for-like आधार पर तुलना करना आसान हो जाता है।
Simple ROI पूरे period का total return बताता है। CAGR equivalent average annual return बताता है, जो अलग-अलग durations के लिए held investments की तुलना के लिए अधिक उपयोगी है। 10 साल में 50% ROI return करने वाले investment का CAGR (≈4.1%) 3 साल में 50% return करने वाले (≈14.5%) से काफ़ी कम है, भले ही simple ROI identical है। Asset classes — FDs, mutual funds, stocks, real estate — की तुलना के लिए हमेशा simple ROI की बजाय CAGR compare करें।
Business contexts में ROI सिर्फ़ financial investments तक सीमित नहीं है — ₹50,000 की marketing campaign जिसने ₹2,00,000 की additional sales generate की उसका ROI 300% है, जिससे budget के अन्य uses से comparison करना straightforward हो जाता है। ROI की एक important limitation यह है कि यह time risk account नहीं करता — इसीलिए जब durations differ हों तो हमेशा annualized ROI (CAGR) बेहतर comparison metric है, और professional investors risk-adjusted metrics जैसे Sharpe ratio इस्तेमाल करते हैं।
Business contexts में, ROI financial investments से आगे किसी भी expenditure का return evaluate करने तक extend होता है — marketing campaigns, employee training, software subscriptions, या equipment purchases। एक marketing campaign जिसकी cost ₹50,000 थी और जिसने ₹2,00,000 की additional sales generate की, उसका ROI 300% है, जिससे उस budget के अन्य uses से comparison करना और एक clear, quantifiable metric के साथ stakeholders को spend justify करना straightforward हो जाता है।