PocketReturn on Investment (ROI) Calculator
Check investment returns. Input your initial capital and final value to calculate absolute and annualized returns.
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Total ROI (Return Rate)
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Annualized Return (CAGR)
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Net Return Profit
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ROI Calculation Formula
ROI calculates raw return relative to cost; annualized ROI accounts for time duration:
- Total ROI (%): [ (Final Value - Initial Cost) / Initial Cost ] × 100
- Annualized ROI (%): [ (Final Value / Initial Cost)(1 / Years) - 1 ] × 100
Worked Example
If you invest ₹1,00,000 and sell it in 4 years for ₹1,80,000:
- Net Capital Profit: ₹80,000
- Total ROI Rate: 80.00%
- Annualized Return: 15.83% per year
Frequently Asked Questions
What is ROI?
ROI stands for Return on Investment. It is a financial metric used to evaluate the efficiency or profitability of an investment relative to its initial cost.
How is annualized ROI different from total ROI?
Total ROI shows the absolute return rate over the entire holding period, regardless of whether it took 1 year or 10 years. Annualized ROI standardizes returns on a per-year compounding basis.
What are the limitations of ROI?
ROI only measures price returns. It does not account for dividend/rent cash flows, inflation, or the tax rate payable on exit.
Can ROI be negative?
Yes, if you sell your asset for less than your purchase price, the ROI is negative, indicating a capital loss.
How do you calculate ROI for real estate?
Real estate ROI should include purchase price plus transaction fees (stamp duty, brokerage) as initial cost, and net sale price plus rental income as final value.