Finance Guide
ROI Calculator Guide — Return on Investment Calculation India
ROI Formula
ROI % = (Net Profit ÷ Cost of Investment) × 100
Net Profit = Final Value − Initial Investment
Example: Invested Rs.1 lakh, got Rs.1.5 lakh
ROI = (50,000 ÷ 1,00,000) × 100 = 50%
ROI vs CAGR — When to Use Which
| Metric | Use When | Example |
|---|---|---|
| ROI | Simple return %, any timeframe | Rs.1L → Rs.2L = 100% ROI |
| CAGR | Annualized return for comparison | 100% over 5 yrs = 14.87% CAGR |
| IRR | Multiple cash flows (SIP, real estate) | Monthly SIP vs final value |
Good ROI Benchmarks in India
- Savings account: 3-4% p.a.
- Fixed Deposit: 6.5-7.5% p.a.
- PPF: 7.1% p.a. (tax-free)
- Debt mutual fund: 7-9% p.a.
- Large cap equity: 12-14% CAGR (long term)
- Real estate (metro): 8-12% incl. rental
- Gold: 10-11% CAGR (20-year average)
💡 Always compare investments using CAGR, not absolute ROI. A 50% ROI over 1 year beats a 100% ROI over 10 years (14.87% CAGR).