{"id":6039,"date":"2026-10-23T15:00:04","date_gmt":"2026-10-23T09:30:04","guid":{"rendered":"https:\/\/callerdesk.io\/blog\/?p=6039"},"modified":"2026-10-23T15:00:07","modified_gmt":"2026-10-23T09:30:07","slug":"roi-formula-free-roi-calculator","status":"publish","type":"post","link":"https:\/\/callerdesk.io\/blog\/roi-formula-free-roi-calculator\/","title":{"rendered":"ROI Formula: How to Calculate Return on Investment (With Free Calculator)"},"content":{"rendered":"\n<p>The <strong>Return on Investment (ROI) formula<\/strong> shows how much you gained or lost compared with the amount you invested. It is usually written as a percentage.<\/p>\n\n\n\n<p><strong>ROI = (Net Gain \u00f7 Cost of Investment) \u00d7 100<\/strong><\/p>\n\n\n\n<p>For example, if you invest \u20b950,000 and its value rises to \u20b960,000, your net gain is \u20b910,000. Your ROI is <strong>20%<\/strong>.<\/p>\n\n\n\n<p>The calculation is simple, but an accurate result depends on including the right costs and considering how long the investment took to earn a return. This guide explains the formula, walks through common examples and shows how to calculate annualised ROI. Use the calculator below to check your own figures.<\/p>\n\n\n\n<p>New to the term? Read our guide to <a href=\"https:\/\/callerdesk.io\/blog\/roi-full-form\"><strong>ROI full form and meaning<\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Free ROI Calculator<\/strong><\/h2>\n\n\n\n<p>Enter the cost of your investment and the final value. Add the time period to calculate annualised ROI as well. The calculator uses the formulas explained in this guide.<\/p>\n\n\n\n<!-- ROI Calculator: paste this entire code into a \"Custom HTML\" block in your blog post -->\n<div class=\"roic\" id=\"roic\">\n  <style>\n    .roic{--roic-accent:#e52d32;--roic-accent-dark:#c41f25;--roic-green:#0f9d58;--roic-red:#b42318;--roic-text:#29294b;--roic-muted:#6b6b85;--roic-border:#e6e6f0;--roic-bg:#ffffff;--roic-soft:#fff4f4;\n      box-sizing:border-box;max-width:640px;margin:24px auto;padding:24px;background:var(--roic-bg);color:var(--roic-text);\n      border:1px solid var(--roic-border);border-top:5px solid var(--roic-accent);border-radius:16px;box-shadow:0 8px 24px rgba(41,41,75,.08);\n      font-family:\"DM Sans\",-apple-system,BlinkMacSystemFont,\"Segoe UI\",Roboto,Arial,sans-serif;line-height:1.5}\n    .roic *,.roic *::before,.roic *::after{box-sizing:border-box}\n    .roic h3{margin:0 0 4px;font-size:24px;line-height:1.3;font-weight:700;color:var(--roic-text)}\n    .roic .roic-sub{margin:0 0 20px;font-size:14px;color:var(--roic-muted)}\n    .roic .roic-field{margin-bottom:16px}\n    .roic label{display:block;margin-bottom:6px;font-size:14px;font-weight:600;color:var(--roic-text)}\n    .roic .roic-input{display:flex;align-items:center;border:1px solid var(--roic-border);border-radius:10px;background:#fff;overflow:hidden}\n    .roic .roic-input:focus-within{border-color:var(--roic-accent);box-shadow:0 0 0 3px rgba(229,45,50,.15)}\n    .roic .roic-pre{padding:0 12px;font-size:16px;color:var(--roic-muted)}\n    .roic input,.roic select{width:100%;min-width:0;padding:12px;border:0;outline:0;background:transparent;font-size:16px;color:var(--roic-text);font-family:inherit}\n    .roic .roic-pre + input{padding-left:0}\n    .roic select{width:auto;border-left:1px solid var(--roic-border);background:var(--roic-soft);cursor:pointer}\n    .roic .roic-hint{margin-top:4px;font-size:12px;color:var(--roic-muted)}\n    .roic .roic-btns{display:flex;gap:10px;margin:4px 0 20px}\n    .roic button{flex:1;padding:12px;border-radius:40px;font-size:16px;font-weight:700;cursor:pointer;font-family:inherit;border:2px solid var(--roic-accent);transition:background .15s,color .15s}\n    .roic .roic-go{background:var(--roic-accent);color:#fff}\n    .roic .roic-go:hover{background:var(--roic-accent-dark);border-color:var(--roic-accent-dark)}\n    .roic .roic-reset{background:#fff;color:var(--roic-accent)}\n    .roic .roic-reset:hover{background:var(--roic-soft)}\n    .roic .roic-err{display:none;margin:-8px 0 16px;padding:10px 12px;border-radius:8px;background:#fdecec;color:var(--roic-red);font-size:14px}\n    .roic .roic-res{display:none;padding:18px;border-radius:12px;background:var(--roic-soft);border:1px solid #fbd9da}\n    .roic .roic-big{text-align:center;margin-bottom:14px}\n    .roic .roic-big span{display:block;font-size:13px;color:var(--roic-muted);text-transform:uppercase;letter-spacing:.04em}\n    .roic .roic-big strong{display:block;font-size:40px;line-height:1.2}\n    .roic .roic-grid{display:grid;grid-template-columns:1fr 1fr;gap:10px}\n    .roic .roic-item{padding:12px;border-radius:10px;background:#fff;border:1px solid var(--roic-border)}\n    .roic .roic-item span{display:block;font-size:12px;color:var(--roic-muted)}\n    .roic .roic-item strong{display:block;font-size:18px;word-break:break-word}\n    .roic .roic-pos{color:var(--roic-green)}\n    .roic .roic-neg{color:var(--roic-red)}\n    .roic .roic-note{margin:14px 0 0;font-size:14px;color:var(--roic-text)}\n    .roic .roic-formula{margin-top:18px;font-size:13px;color:var(--roic-muted);text-align:center}\n    @media (max-width:480px){.roic{padding:16px;margin:16px 0}.roic .roic-grid{grid-template-columns:1fr}.roic .roic-big strong{font-size:34px}}\n  <\/style>\n\n  <h3>ROI Calculator<\/h3>\n  <p class=\"roic-sub\">Calculate your Return on Investment (ROI) instantly.<\/p>\n\n  <div class=\"roic-field\">\n    <label for=\"roic-inv\">Cost of Investment<\/label>\n    <div class=\"roic-input\"><span class=\"roic-pre\">\u20b9<\/span><input id=\"roic-inv\" type=\"number\" inputmode=\"decimal\" min=\"0\" step=\"any\" placeholder=\"50000\"><\/div>\n    <div class=\"roic-hint\">Purchase price plus brokerage, fees, taxes and setup costs.<\/div>\n  <\/div>\n\n  <div class=\"roic-field\">\n    <label for=\"roic-ret\">Final Value<\/label>\n    <div class=\"roic-input\"><span class=\"roic-pre\">\u20b9<\/span><input id=\"roic-ret\" type=\"number\" inputmode=\"decimal\" min=\"0\" step=\"any\" placeholder=\"60000\"><\/div>\n    <div class=\"roic-hint\">Sale value plus dividends, rent or interest received, minus selling costs.<\/div>\n  <\/div>\n\n  <div class=\"roic-field\">\n    <label for=\"roic-time\">Time Period (Optional)<\/label>\n    <div class=\"roic-input\">\n      <input id=\"roic-time\" type=\"number\" inputmode=\"decimal\" min=\"0\" step=\"any\" placeholder=\"1\">\n      <select id=\"roic-unit\" aria-label=\"Time unit\"><option value=\"y\">Years<\/option><option value=\"m\">Months<\/option><\/select>\n    <\/div>\n    <div class=\"roic-hint\">Add the time period to also see your annualised ROI (yearly return).<\/div>\n  <\/div>\n\n  <div class=\"roic-btns\">\n    <button type=\"button\" class=\"roic-go\" id=\"roic-go\">Calculate ROI<\/button>\n    <button type=\"button\" class=\"roic-reset\" id=\"roic-reset\">Reset<\/button>\n  <\/div>\n\n  <div class=\"roic-err\" id=\"roic-err\" role=\"alert\"><\/div>\n\n  <div class=\"roic-res\" id=\"roic-res\" aria-live=\"polite\">\n    <div class=\"roic-big\"><span>Your ROI<\/span><strong id=\"roic-pct\">0%<\/strong><\/div>\n    <div class=\"roic-grid\">\n      <div class=\"roic-item\"><span>Net Gain \/ Loss<\/span><strong id=\"roic-profit\">\u20b90<\/strong><\/div>\n      <div class=\"roic-item\"><span>Annualised ROI<\/span><strong id=\"roic-ann\">\u2014<\/strong><\/div>\n      <div class=\"roic-item\"><span>Cost of Investment<\/span><strong id=\"roic-o-inv\">\u20b90<\/strong><\/div>\n      <div class=\"roic-item\"><span>Final Value<\/span><strong id=\"roic-o-ret\">\u20b90<\/strong><\/div>\n    <\/div>\n    <p class=\"roic-note\" id=\"roic-note\"><\/p>\n  <\/div>\n\n  <div class=\"roic-formula\">\n    ROI = (Net Gain \u00f7 Cost of Investment) \u00d7 100, where Net Gain = Final Value \u2212 Cost of Investment<br>\n    Annualised ROI = ((Final Value \u00f7 Cost of Investment)<sup>1\/n<\/sup> \u2212 1) \u00d7 100, where n = number of years\n  <\/div>\n\n  <script>\n  (function(){\n    var root=document.getElementById('roic');\n    if(!root) return;\n    function $(id){return root.querySelector('#'+id);}\n    var inv=$('roic-inv'),ret=$('roic-ret'),time=$('roic-time'),unit=$('roic-unit'),\n        err=$('roic-err'),res=$('roic-res');\n\n    function money(n){\n      var sign=n<0?'-':'';\n      return sign+'\u20b9'+Math.abs(n).toLocaleString('en-IN',{maximumFractionDigits:2});\n    }\n    function pct(n){\n      return (n>0?'+':'')+n.toLocaleString('en-IN',{maximumFractionDigits:2})+'%';\n    }\n    function tone(el,n){\n      el.classList.remove('roic-pos','roic-neg');\n      if(n>0) el.classList.add('roic-pos'); else if(n<0) el.classList.add('roic-neg');\n    }\n    function showErr(msg){err.textContent=msg;err.style.display='block';res.style.display='none';}\n\n    function calc(){\n      var i=parseFloat(inv.value),r=parseFloat(ret.value),t=parseFloat(time.value);\n      if(!(i>0)) return showErr('Please enter a cost of investment greater than 0.');\n      if(isNaN(r)||r<0) return showErr('Please enter a valid final value (0 or more).');\n      err.style.display='none';\n\n      var profit=r-i, roi=profit\/i*100;\n      var years=t>0?(unit.value==='m'?t\/12:t):0;\n      var ann=null;\n      if(years>0 && r>0) ann=(Math.pow(r\/i,1\/years)-1)*100;\n\n      var pEl=$('roic-pct'),prEl=$('roic-profit'),aEl=$('roic-ann');\n      pEl.textContent=pct(roi); tone(pEl,roi);\n      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A negative ROI means the investment is worth less than its original cost.';\n      else note='No profit, no loss: your ROI is 0%. You got back exactly what you put in.';\n      if(roi>100) note+=' You more than doubled your money.';\n      else if(roi===100) note+=' You doubled your money.';\n      if(ann!==null) note+=' Your annualised ROI is about '+pct(ann)+' per year.';\n      $('roic-note').textContent=note;\n\n      res.style.display='block';\n    }\n\n    $('roic-go').addEventListener('click',calc);\n    root.addEventListener('keydown',function(e){if(e.key==='Enter'&&e.target.tagName==='INPUT'){e.preventDefault();calc();}});\n    $('roic-reset').addEventListener('click',function(){\n      inv.value='';ret.value='';time.value='';unit.value='y';\n      err.style.display='none';res.style.display='none';inv.focus();\n    });\n  })();\n  <\/script>\n<\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The ROI Formula Explained<\/strong><\/h2>\n\n\n\n<p>There are two common ways to write the Return on Investment formula. They produce the same result when you use the figures consistently.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Formula 1: Calculate ROI Using Net Gain<\/strong><\/h3>\n\n\n\n<p><strong>ROI = (Net Gain \u00f7 Cost of Investment) \u00d7 100<\/strong><\/p>\n\n\n\n<p>Net gain is the amount left after you subtract the investment cost and any other relevant expenses from the total value received.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Formula 2: Calculate ROI Using Initial and Final Values<\/strong><\/h3>\n\n\n\n<p><strong>ROI = ((Final Value \u2212 Initial Value) \u00f7 Initial Value) \u00d7 100<\/strong><\/p>\n\n\n\n<p>This version works when the final value includes all the income received from the investment and any relevant selling costs have been deducted.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Term<\/strong><\/td><td><strong>Meaning<\/strong><\/td><td><strong>Examples to include<\/strong><\/td><\/tr><tr><td><strong>Cost of investment<\/strong> or <strong>initial value<\/strong><\/td><td>The total amount spent to make the investment<\/td><td>Purchase price, brokerage, fees, taxes and setup costs<\/td><\/tr><tr><td><strong>Final value<\/strong><\/td><td>The total value received from the investment<\/td><td>Sale proceeds, dividends, rent or interest, after relevant selling costs<\/td><\/tr><tr><td><strong>Net gain<\/strong><\/td><td>Final value minus the total investment cost<\/td><td>May be positive if you made a gain or negative if you made a loss<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The costs you include depend on the investment. For example, property ROI may include purchase-related expenses and maintenance, while campaign ROI should account for product costs as well as advertising spend.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Calculate ROI Step by Step<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 1: Add Up the Total Investment Cost<\/strong><\/h3>\n\n\n\n<p>Start with the amount invested. Add related expenses such as brokerage, setup charges, platform fees, repairs or other costs that are part of the decision.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 2: Calculate the Total Value Received<\/strong><\/h3>\n\n\n\n<p>Add the final sale value and any income received during the investment period, such as dividends, rent or interest. Deduct relevant selling charges.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 3: Work Out the Net Gain or Loss<\/strong><\/h3>\n\n\n\n<p>Subtract the total investment cost from the total value received. A positive result is a gain. A negative result is a loss.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 4: Apply the ROI Formula<\/strong><\/h3>\n\n\n\n<p>Divide the net gain or loss by the total investment cost, then multiply by 100 to express the result as a percentage.<\/p>\n\n\n\n<p>This method works for many decisions, including shares, property, business purchases and marketing campaigns. The key is to use costs and returns that relate to the same investment and time period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>ROI Examples<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example 1: Calculating ROI on Shares, Including Brokerage<\/strong><\/h3>\n\n\n\n<p>Suppose you buy 100 shares at \u20b9500 each and pay \u20b9100 in charges. Later, you sell the shares at \u20b9560 each and pay another \u20b9100 in charges.<\/p>\n\n\n\n<p>Your total cost is <strong>(100 \u00d7 \u20b9500) + \u20b9100 = \u20b950,100<\/strong>. After deducting the selling charge, the amount received is <strong>(100 \u00d7 \u20b9560) \u2212 \u20b9100 = \u20b955,900<\/strong>. Your net gain is <strong>\u20b955,900 \u2212 \u20b950,100 = \u20b95,800<\/strong>.<\/p>\n\n\n\n<p><strong>ROI = (\u20b95,800 \u00f7 \u20b950,100) \u00d7 100 = 11.58%<\/strong><\/p>\n\n\n\n<p>If you leave out the charges, the ROI appears to be 12%. Even small costs can change the final result.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example 2: Calculating ROI on a Property<\/strong><\/h3>\n\n\n\n<p>Suppose you buy a flat for \u20b940,00,000 and spend another \u20b93,00,000 on stamp duty, registration and repairs. Five years later, you sell it for \u20b955,00,000.<\/p>\n\n\n\n<p>Your total cost is <strong>\u20b943,00,000<\/strong> and your net gain is <strong>\u20b955,00,000 \u2212 \u20b943,00,000 = \u20b912,00,000<\/strong>.<\/p>\n\n\n\n<p><strong>ROI = (\u20b912,00,000 \u00f7 \u20b943,00,000) \u00d7 100 = 27.91%<\/strong><\/p>\n\n\n\n<p>This is the total ROI over five years. It does not include rental income, ongoing maintenance, taxes or other expenses. It also does not account for time. If there was no rental income or other return, the annualised ROI would be about <strong>5.05% per year<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example 3: Calculating ROI on a Marketing Campaign<\/strong><\/h3>\n\n\n\n<p>Suppose you spend \u20b920,000 on online ads. The campaign generates \u20b980,000 in sales, and the products sold cost \u20b935,000.<\/p>\n\n\n\n<p>The profit from sales before advertising is <strong>\u20b980,000 \u2212 \u20b935,000 = \u20b945,000<\/strong>. After deducting the \u20b920,000 ad spend, the net gain is <strong>\u20b925,000<\/strong>.<\/p>\n\n\n\n<p><strong>ROI = (\u20b925,000 \u00f7 \u20b920,000) \u00d7 100 = 125%<\/strong><\/p>\n\n\n\n<p>This calculation uses profit after product and advertising costs, not total sales. Using the full \u20b980,000 in revenue would overstate the campaign&#8217;s return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example 4: Calculating ROI When an Investment Loses Value<\/strong><\/h3>\n\n\n\n<p>Suppose you invest \u20b930,000 in a mutual fund and its value falls to \u20b925,500. Your loss is <strong>\u20b925,500 \u2212 \u20b930,000 = \u2212\u20b94,500<\/strong>.<\/p>\n\n\n\n<p><strong>ROI = (\u2212\u20b94,500 \u00f7 \u20b930,000) \u00d7 100 = \u221215%<\/strong><\/p>\n\n\n\n<p>A negative ROI means the investment is worth less than its original cost. This example does not include any fees, taxes or distributions.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example 5: Including Dividends in ROI<\/strong><\/h3>\n\n\n\n<p>Suppose you buy 200 shares at \u20b9250 each, for a total cost of \u20b950,000. While holding them, you receive \u20b91,500 in dividends. You later sell the shares for \u20b955,000.<\/p>\n\n\n\n<p>The total value received is <strong>\u20b955,000 + \u20b91,500 = \u20b956,500<\/strong>. Your net gain is <strong>\u20b956,500 \u2212 \u20b950,000 = \u20b96,500<\/strong>.<\/p>\n\n\n\n<p><strong>ROI = (\u20b96,500 \u00f7 \u20b950,000) \u00d7 100 = 13%<\/strong><\/p>\n\n\n\n<p>Without the dividends, the ROI would be 10%. The same principle applies to rent from a property or interest from a bond: include the income the investment generated, along with applicable costs.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Annualised ROI: How to Include Time<\/strong><\/h2>\n\n\n\n<p>Basic ROI shows the total gain or loss, but it does not show how long it took. A 30% return over two years is different from a 30% return over five years. <strong>Annualised ROI<\/strong> converts a return into an average yearly rate, taking compounding into account.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"297\" src=\"https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1024x297.png\" alt=\"\" class=\"wp-image-6040\" srcset=\"https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1024x297.png 1024w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-300x87.png 300w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-768x223.png 768w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-400x116.png 400w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-800x232.png 800w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-832x241.png 832w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-150x44.png 150w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>Annualised ROI = ((Final Value \u00f7 Initial Value)^(1 \u00f7 n) \u2212 1) \u00d7 100<\/strong><\/p>\n\n\n\n<p>Here, <strong>n<\/strong> is the number of years. This formula assumes one initial investment and a final value that includes the return being measured. For investments with deposits or withdrawals at different times, such as a SIP, use XIRR instead.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example: Compare Two Investments Over Different Periods<\/strong><\/h3>\n\n\n\n<p>Investment A earns a total return of 50% over five years. Investment B earns 30% over two years.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Investment<\/strong><\/td><td><strong>Total ROI<\/strong><\/td><td><strong>Period<\/strong><\/td><td><strong>Annualised ROI<\/strong><\/td><\/tr><tr><td>A<\/td><td>50%<\/td><td>5 years<\/td><td>About 8.45% per year<\/td><\/tr><tr><td>B<\/td><td>30%<\/td><td>2 years<\/td><td>About 14.02% per year<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Investment A has the higher total ROI, but Investment B grew at a faster annual rate. The property example above follows the same principle: a 27.91% total return over five years is about 5.05% per year, assuming no other income or cash flows.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Why Dividing Total ROI by the Number of Years Can Be Misleading<\/strong><\/h3>\n\n\n\n<p>A common shortcut is to divide the total ROI by the number of years. For example, dividing 27.91% by five gives 5.58% per year. This ignores compounding and overstates the annualised return. The formula above gives a more accurate comparison when the investment has one initial outlay and one final value.<\/p>\n\n\n\n<p>The calculator above can work out annualised ROI for you. Enter the Cost of Investment , final value and time period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How to Calculate ROI in Excel or Google Sheets<\/strong><\/h2>\n\n\n\n<p>Enter the investment cost in cell <strong>A2<\/strong>, the final value in <strong>B2<\/strong> and the number of years in <strong>C2<\/strong>. Make sure the final value includes any income you want to count, such as dividends, and that relevant costs have been deducted.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"258\" src=\"https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-1024x258.png\" alt=\"\" class=\"wp-image-6041\" srcset=\"https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-1024x258.png 1024w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-300x76.png 300w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-768x193.png 768w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-400x101.png 400w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-800x201.png 800w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-832x209.png 832w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1-150x38.png 150w, https:\/\/callerdesk.io\/blog\/wp-content\/uploads\/2026\/10\/image-1.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Calculation<\/strong><\/td><td><strong>Formula<\/strong><\/td><\/tr><tr><td>Total ROI<\/td><td>=(B2-A2)\/A2<\/td><\/tr><tr><td>Annualised ROI<\/td><td>=(B2\/A2)^(1\/C2)-1<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Format the result cell as a percentage. The spreadsheet will display the result as a percentage automatically, so you do not need to multiply by 100 in the formula.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Borrowed Money Changes ROI: Leverage<\/strong><\/h2>\n\n\n\n<p>When you borrow money to fund an investment, the return on your own money can rise, but your losses can also become larger. This is known as <strong>leverage<\/strong>. Loan interest and repayment remain due even if the investment loses value.<\/p>\n\n\n\n<p>Suppose you invest \u20b91,00,000 of your own money and borrow another \u20b91,00,000 at 10% interest for one year. You invest \u20b92,00,000 in total. After one year, you repay \u20b91,10,000, including the loan principal and interest.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Scenario<\/strong><\/td><td><strong>Investment value after one year<\/strong><\/td><td><strong>Amount left after repaying loan and interest<\/strong><\/td><td><strong>ROI on your \u20b91,00,000<\/strong><\/td><td><strong>ROI without a loan<\/strong><\/td><\/tr><tr><td>Investment rises by 15%<\/td><td>\u20b92,30,000<\/td><td>\u20b91,20,000<\/td><td><strong>+20%<\/strong><\/td><td>+15%<\/td><\/tr><tr><td>Investment falls by 10%<\/td><td>\u20b91,80,000<\/td><td>\u20b970,000<\/td><td><strong>\u221230%<\/strong><\/td><td>\u221210%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>With leverage, the 15% gain on the full investment produces a 20% return on your own money after loan interest. A 10% fall in the investment, however, creates a 30% loss on your own money. This simplified example excludes taxes, transaction fees and other charges. Consider both the potential gain and the additional risk before borrowing to invest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Expected ROI vs Actual ROI<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Expected ROI: Estimate Before Investing<\/strong><\/h3>\n\n\n\n<p>Before investing, use realistic estimates of costs and potential gains to judge whether the idea may be worthwhile. Include likely fees and allow for possible delays or lower-than-expected returns.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Actual ROI: Calculate After Investing<\/strong><\/h3>\n\n\n\n<p>After the investment period, use the actual costs and returns to calculate what happened. Comparing actual ROI with your estimate can show where your assumptions were accurate and what you may need to change next time.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Other Formulas Related to ROI<\/strong><\/h2>\n\n\n\n<p>Depending on the industry, you may come across other measures that answer related questions.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Formula<\/strong><\/td><td><strong>How it is calculated<\/strong><\/td><td><strong>Where it is used<\/strong><\/td><\/tr><tr><td><strong>ROAS<\/strong> (Return on Ad Spend)<\/td><td>Revenue attributed to ads \u00f7 advertising cost<\/td><td>Digital marketing<\/td><\/tr><tr><td><strong>Rental yield<\/strong><\/td><td>(Annual rent \u00f7 property price) \u00d7 100<\/td><td>Real estate<\/td><\/tr><tr><td><strong>Payback period<\/strong><\/td><td>Investment cost \u00f7 annual net savings or cash inflow<\/td><td>Business and manufacturing<\/td><\/tr><tr><td><strong>CAGR<\/strong> (Compound Annual Growth Rate)<\/td><td>((Final value \u00f7 Initial value)^(1 \u00f7 n) \u2212 1) \u00d7 100<\/td><td>Investment or business growth over time<\/td><\/tr><tr><td><strong>XIRR<\/strong><\/td><td>Annualised return calculated from dated cash flows<\/td><td>SIPs and investments with multiple deposits or withdrawals<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>For more information, read our guide to <a href=\"https:\/\/callerdesk.io\/blog\/roi-full-form\"><strong>ROI meaning and ROI in different industries<\/strong><\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Common Mistakes When Calculating ROI<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Forgetting Additional Costs<\/strong><\/h3>\n\n\n\n<p>Brokerage, taxes, stamp duty, maintenance and platform fees all affect the return. Include the costs that apply to the investment so the result reflects what you actually gained or lost.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Using Revenue Instead of Profit<\/strong><\/h3>\n\n\n\n<p>Revenue is not the same as profit. In a marketing calculation, subtract the cost of the products or services sold and the advertising spend before calculating ROI.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Ignoring the Time Period<\/strong><\/h3>\n\n\n\n<p>A high total ROI may have taken many years to earn. Use annualised ROI when comparing investments held for different lengths of time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Leaving Out Taxes<\/strong><\/h3>\n\n\n\n<p>Taxes can reduce the amount you keep. Include applicable taxes when you need to understand your after-tax return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Comparing Investments With Different Risk Levels<\/strong><\/h3>\n\n\n\n<p>An investment with a high potential ROI may also carry a greater chance of loss. Consider the risk and time period before comparing it with a steadier investment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Frequently Asked Questions<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Is the Formula for Return on Investment?<\/strong><\/h3>\n\n\n\n<p><strong>ROI = (Net Gain \u00f7 Cost of Investment) \u00d7 100.<\/strong> Net gain is the total value received minus the investment cost and other relevant expenses.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Do I Calculate ROI Quickly?<\/strong><\/h3>\n\n\n\n<p>Subtract the total investment cost from the total value received. Divide the result by the investment cost and multiply by 100. You can also use the free calculator on this page.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can ROI Be More Than 100%?<\/strong><\/h3>\n\n\n\n<p>Yes. An ROI above 100% means the net gain is greater than the original investment cost. If \u20b910,000 produces a net gain of \u20b915,000, the ROI is 150% and the total value received is \u20b925,000.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Is the Difference Between ROI and Annualised ROI?<\/strong><\/h3>\n\n\n\n<p>ROI shows the total gain or loss over the full period. Annualised ROI expresses the return as an average yearly rate, making it easier to compare investments held for different lengths of time.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Should I Include Taxes and Fees in the ROI Calculation?<\/strong><\/h3>\n\n\n\n<p>Yes. Include relevant costs and taxes when calculating the return you actually keep. Leaving them out can make ROI look higher than it is.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Is ROI Always Shown as a Percentage?<\/strong><\/h3>\n\n\n\n<p>ROI is usually shown as a percentage. It can also be written as a ratio, such as 0.20 instead of 20%, but the percentage is easier to read and compare.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Do I Calculate ROI on a SIP?<\/strong><\/h3>\n\n\n\n<p>Simple ROI does not account for the fact that each SIP instalment is invested for a different length of time. Use XIRR to estimate the annualised return across multiple deposits and withdrawals. Many investment platforms display XIRR, and spreadsheet programmes also have an XIRR function.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Should I Calculate ROI Before or After Investing?<\/strong><\/h3>\n\n\n\n<p>Both. Estimate expected ROI before investing to assess whether the idea may be worthwhile. After the investment period, calculate actual ROI using the real costs and returns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<p>The ROI formula, <strong>(Net Gain \u00f7 Cost of Investment) \u00d7 100<\/strong>, helps you compare the gain or loss with the amount invested. To get a useful result, include relevant costs, use profit rather than revenue and consider the time taken to earn the return. Annualised ROI can help when you are comparing investments held for different periods, while XIRR is more suitable for investments with cash flows at different times.<\/p>\n\n\n\n<p>Enter your figures in the calculator above to estimate your return. For a basic explanation of the term and how it is used, read our guide to <a href=\"https:\/\/callerdesk.io\/blog\/roi-full-form\"><strong>ROI full form and meaning<\/strong><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The Return on Investment (ROI) formula shows how much you gained or lost compared with the amount you&hellip;","protected":false},"author":2,"featured_media":6043,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"csco_singular_sidebar":"","csco_page_header_type":"","csco_page_load_nextpost":"","footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-6039","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-cloud-contact-center","8":"cs-entry"},"_links":{"self":[{"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/posts\/6039","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/comments?post=6039"}],"version-history":[{"count":1,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/posts\/6039\/revisions"}],"predecessor-version":[{"id":6042,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/posts\/6039\/revisions\/6042"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/media\/6043"}],"wp:attachment":[{"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/media?parent=6039"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/categories?post=6039"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/callerdesk.io\/blog\/wp-json\/wp\/v2\/tags?post=6039"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}