Investment Return Calculator Explained

Q: What is ROI?

ROI (Return on Investment) is the percentage gain or loss on an investment relative to its cost. ROI = ((Final value - Initial cost) / Initial cost) × 100. A ₹1,00,000 investment that grows to ₹1,50,000 has ROI = (50,000 / 1,00,000) × 100 = 50%. ROI does not account for time — a 50% ROI over 1 year and over 10 years are very different outcomes.

Q: How do I calculate investment returns?

For a single lump sum: CAGR = (Final value / Initial value)^(1/years) - 1. For ₹1 lakh growing to ₹2 lakh in 6 years: CAGR = (2/1)^(1/6) - 1 = 2^0.1667 - 1 = 1.1225 - 1 = 12.25%. For periodic investments (SIP), use XIRR in Excel or a financial calculator.

Q: What is CAGR and how is it calculated?

CAGR (Compound Annual Growth Rate) is the rate at which an investment would need to grow each year to reach its final value from its starting value, assuming compounding. Formula: CAGR = (Ending value / Beginning value)^(1/n) - 1, where n is the number of years. CAGR is the standard measure for comparing multi-year investment performance.

Q: What is a good annual return on investment?

Context matters: Indian large-cap equity funds averaged 12–15% CAGR over the past 10 years. Real estate in Tier-1 cities averaged 8–12% appreciation. FDs return 6.5–7.5%. Savings accounts: 3–7%. Global equity (S&P 500): approximately 10% historical average. A 'good' return beats inflation (currently ~5%) and your alternative options.

Q: How do I compare investment returns across asset classes?

Convert all returns to CAGR for a fair comparison. Then adjust for risk (standard deviation or maximum drawdown), liquidity (how quickly you can exit), and tax treatment. Equity LTCG is taxed at 12.5%; FD interest at your slab rate; real estate gains at 12.5% LTCG after indexation. Post-tax, risk-adjusted CAGR is the most honest comparison.

Calculate ROI, CAGR, and annualized returns for any investment across stocks, mutual funds, and real estate.

Published: 2026-01-03

Tags: investment return calculator, ROI calculator, CAGR calculator online

Investment Return Calculator Explained ROI tells you how much you gained. CAGR tells you how fast you grew. XIRR tells you the real return on investments with multiple cash flows. Three different metrics for three different questions — and a single investment return calculator handles all of them. --- See our Complete Guide to Financial Calculators What is roi, cagr, and xirr: when to use each? | Metric | Best For | Formula | Limitation | |---|---|---|---| | ROI | Quick total return | (Gain / Cost) × 100 | Ignores time | | CAGR | Lump sum, multi-year | (End/Start)^(1/n) - 1 | Ignores periodic flows | | XIRR | SIP, irregular cash flows | Excel/calculator only | Complex to compute manually | | Absolute return | Short-term (<1 year) | (End - Start) / Start × 100 | Not annualised | What is…

Frequently Asked Questions

What is ROI?

ROI (Return on Investment) is the percentage gain or loss on an investment relative to its cost. ROI = ((Final value - Initial cost) / Initial cost) × 100. A ₹1,00,000 investment that grows to ₹1,50,000 has ROI = (50,000 / 1,00,000) × 100 = 50%. ROI does not account for time — a 50% ROI over 1 year and over 10 years are very different outcomes.

How do I calculate investment returns?

For a single lump sum: CAGR = (Final value / Initial value)^(1/years) - 1. For ₹1 lakh growing to ₹2 lakh in 6 years: CAGR = (2/1)^(1/6) - 1 = 2^0.1667 - 1 = 1.1225 - 1 = 12.25%. For periodic investments (SIP), use XIRR in Excel or a financial calculator.

What is CAGR and how is it calculated?

CAGR (Compound Annual Growth Rate) is the rate at which an investment would need to grow each year to reach its final value from its starting value, assuming compounding. Formula: CAGR = (Ending value / Beginning value)^(1/n) - 1, where n is the number of years. CAGR is the standard measure for comparing multi-year investment performance.

What is a good annual return on investment?

Context matters: Indian large-cap equity funds averaged 12–15% CAGR over the past 10 years. Real estate in Tier-1 cities averaged 8–12% appreciation. FDs return 6.5–7.5%. Savings accounts: 3–7%. Global equity (S&P 500): approximately 10% historical average. A 'good' return beats inflation (currently ~5%) and your alternative options.

How do I compare investment returns across asset classes?

Convert all returns to CAGR for a fair comparison. Then adjust for risk (standard deviation or maximum drawdown), liquidity (how quickly you can exit), and tax treatment. Equity LTCG is taxed at 12.5%; FD interest at your slab rate; real estate gains at 12.5% LTCG after indexation. Post-tax, risk-adjusted CAGR is the most honest comparison.

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