Why is Annualized ROI better than Simple ROI?

Simple ROI does not take holding duration into account. A 50% Simple ROI earned over 2 years represents a 22.5% annual return, whereas a 50% Simple ROI earned over 10 years is only 4.1% per year. Annualized ROI enables apples-to-apples comparisons across different asset classes.

ROI Calculator

Investment Details

Initial Investment

₹

Final Value of Investment

₹

Term Period

Yrs

Mos

Return on Investment

Annualized ROI (CAGR)

0.00%

Absolute ROI

0.00%

Net Profit

₹0

Guide & Methodology

About the Return on Investment (ROI) Calculator

Measure the profitability, percentage efficiency, and annualized rate of return (CAGR) for any financial or business investment.

What this calculator does

Calculates total percentage return on capital invested.
Calculates Annualized ROI / Compound Annual Growth Rate (CAGR) to compare investments of differing durations.
Displays net profit or loss generated after deducting acquisition and holding costs.

How it Works & Key Inputs

Step 1

Initial Investment

Input the total capital outlay spent on the project or asset.

Step 2

Final Return Value

Enter the gross sale proceeds or total value realized.

Step 3

Holding Period

Provide the investment duration to calculate annualized compounding returns.

Core Calculation Parameters

Amount InvestedTotal cash outlay required.

Amount ReturnedTotal proceeds or current asset value.

Investment DurationNumber of years or months held.

Formula & Calculation Logic

Mathematical Model

Simple ROI (%) = [(Final Value - Initial Cost) / Initial Cost] × 100 | Annualized ROI (%) = [(Final Value / Initial Cost)^(1 / t) - 1] × 100

Standard Return on Investment and Compound Annual Growth Rate equations.

Variables Breakdown

ROITotal percentage gain or loss

tTime period in years

Frequently Asked Questions (FAQ)

Disclaimer: This calculator is provided for educational and illustrative purposes only. Actual financial outcomes may vary based on statutory changes, lender terms, fund fees, and prevailing market dynamics.