Investment Parameters
₹ 1,00,000
₹
₹ 1,50,000
₹
3 Years
Years
ROI Summary
Absolute ROI
50.00%
Annualized ROI
14.47%
Net Profit
₹ 50,000
Investment Benchmark Comparison
Beaten
Beaten
Beaten
Beaten
Advertisement
Return on Investment Calculation Formulas
The mathematical representation of absolute and annualized capital growth rates is outlined as follows:
1. Absolute ROI Formula
Absolute ROI = [ ( Vfinal - Vinitial ) / Vinitial ] × 100
2. Annualized ROI (Compounded Annual Yield)
Annualized ROI = [ ( Vfinal / Vinitial ) ( 1 / t ) - 1 ] × 100
Where:
- Vinitial = Invested capital base
- Vfinal = Returned maturity amount
- t = Investment tenure in years
Advertisement
Frequently Asked Questions
A "good" ROI is relative to the investment asset type and its risk profile. Historically, a yearly return of 7% to 10% is considered decent for diversified index funds, while fixed bank deposits typically yield between 5% and 7.5%.
Yes, if the returned or current asset value is less than the original invested capital, the ROI will be negative, representing a capital loss.