# Return on Investment (ROI) Calculator

Total Gain on Investment

₹ 9,00,000

Return on Investment

₹ 900

Simple Annual

180.00 %

CAGR

58.49 %

A simple online ROI calculator can help understand the financial viability of investments, business ideas, and expansion projects. It is a valuable tool for businesses and individuals. ROI is an important metric that helps determine the profitability and efficiency of an investment by comparing the gain or benefit generated from it to the cost of that investment.

It might be useful to learn what ROIs mean, how ROI calculators work, how to calculate ROI, how to calculate ROI on Excel, what the ROI Excel formula is, and what the benefits are of using an ROI calculator.

**What is the ROI?**

When engaging in investments, be it in real estate, gold, silver, stocks, bonds, or commodities, one can anticipate receiving returns. These returns might manifest as interest, gains upon resale, or dividends. Calculating the return on investment involves dividing the total earnings from an investment by the initial investment amount, providing a measure of the investment's profitability. It is a figure that helps you measure how profitable an investment is.

**What is an ROI Calculator?**

A return on investment (ROI) calculator helps understand how profitable an investment is. You should input the investment period, investment amount, and return amount. In some cases, you will need to input the current investment value instead of the return amount. The calculator will show the ROI, simple annual ROI, and the compound annual growth rate (CAGR).

An ROI calculator may sometimes also be called an ROI percentage calculator, or an ROI ratio calculator. You might also find variations of ROI calculators, such as stock market return calculators or fixed deposit (FD) ROI calculators.

**How do ROI Calculators work?**

As inputs, the ROI (return on investment) calculator will require the investment amount, investment period, and the return amount or the current investment value. Then, it will automatically measure the return on investment (ROI), simple annual ROI, and the compound annual growth rate. If you enter the current investment value, the calculator will also show the gains from the investments.

**How to use the Shriram ROI Calculator?**

To use the Shriram ROI Calculator, take the following steps:

STEP 1: Head to the Shriram Finance’s official website

STEP 2: Find the ROI calculator from the ‘Calculators’ drop-down menu and click on it

STEP 3: Enter the investment amount

STEP 4: Enter the current investment value

STEP 5: Select the investment period in years from the slider

STEP 6: The calculator will have calculated the ROI, and you can look at it

You can use the Shriram Finance ROI Calculator to compare profitability and calculate the real return on your investment.

**How to calculate ROI?**

To compute the return on investment (ROI), you must be aware of the investment duration, invested sum, and the current value of the investment.

**ROI calculation formula**

Here, we will discuss ROI formulas with examples to show how you calculate ROI.

You can use the following formula to calculate your ROI with the following ROI formula:

ROI = [(Current Value of Investment / Investment amount)-1] X 100%

The answer will be in percentage terms. The ROI ratio formula is as follows:

ROI = (Current Value of Investment / Investment amount)-1

The output from using the ROI ratio formula will be a decimal number.

If you would like to build an ROI calculator in Excel, the ROI formula for Excel could be of help:

A | B | |

1 | Investment amount | NUMBER |

2 | Current investment value | NUMBER |

3 | Return amount | =B2-B1 |

4 | ROI | =B2/B1-1 |

While building your ROI Excel calculator, please make sure the cell locations match the ones mentioned in the above table.

If you would like to learn your simple annual ROI, you can use the following formula:

Simple annual ROI = {[(Current Value of Investment / Investment amount)-1] X 100%} / Investment period in years

The answer will be in percentage terms.

If you would like to learn your investment CAGR, you can use the following formula:

CAGR = [(Current value of investment / Investment amount) ^ (1 / Investment period in years) – 1] X 100%

The answer will be in percentage terms.

Let us see an ROI calculation example.

Suppose the ongoing inflation is 7%, and you have 2 investment opportunities. You can invest ₹1 lakh and receive a total of ₹1.55 lakh in 5 years, or you can invest ₹1 lakh and get a return of ₹25,000 in 2 years.

Here, ROI for 1st investment opportunity = [₹1,55,000 / ₹1,00,000 - 1] X 100% = 55%

Similarly, ROI for 2nd investment opportunity = [₹1,25,000 / ₹1,00,000 - 1] X 100%= 25%

Once you input the data in the ROI calculator, you will have the information to make the following table:

Investment amount | ₹ 1,00,000.00 | ₹ 1,00,000.00 |

Current investment value | ₹ 1,55,000.00 | ₹ 1,25,000.00 |

Return amount | ₹ 55,000.00 | ₹ 25,000.00 |

Period | 5 | 2 |

ROI | 55% | 25% |

CAGR | 9.16% | 11.80% |

Simple annual ROI | 11% | 13% |

Real return (based on simple annual ROI) | 4.00% | 5.50% |

As you can see, although ₹55,000 is a higher return amount than ₹25,000, that investment has a lower CAGR, simple annual ROI, and actual return. It is even though it had a higher ROI. So, if you wanted to choose the investment that paid a higher return throughout the investment, you would be better off with the investment paying off ₹25,000 in 2 years.

**Benefits of Shriram ROI Calculator**

Calculate more than just ROI

With the Shriram ROI calculator, in addition to ROI, you can see the simple annual ROI and CAGR. So, there is no need to open another calculator to calculate these other profitability measures. A simple ROI calculator can be the one-stop shop for all your investment measuring needs.

**Quick calculations**

Shriram Finance’s ROI calculator will enable you to calculate the ROI instantly. It is way faster than calculating the ROI yourself with or without using a classical calculator. It is quicker than spreadsheets as you do not need to spend time building a model before making the calculations.

**Accuracy**

Shriram Finance’s ROI calculator relies on computers and has been tested multiple times on various scenarios to ensure accurate results while making investment decisions.

**Useful for comparing different investment opportunities**

You can compare the profitability of different investment opportunities with a simple ROI calculator. You can measure ROI differences, simple annual ROI differences, and CAGR differences. This makes it easier to make an informed decision while comparing investments with different periods.

**Conclusion**

Shriram Finance’s online ROI calculator is simple, easy to use, and accurate. It allows you to calculate the simple annual ROI and CAGR in addition to the ROI on your investments. Thus, it is an ideal tool for comparing investments with different periods. You can also compare your ROIs against inflation to ensure you make actual investment returns. The ROI calculator is a handy tool for seasoned and novice investors.

## Frequently Asked Questions (FAQs)

What does ROI stand for?

ROI is an abbreviation for return on investment. It is a metric that helps you understand the profitability of your investments. You can use ROIs to compare investments and see if they provide a return higher than inflation.

How is ROI calculated?

You can calculate ROI by dividing your total return from an investment by the total investment amount.

What are the key inputs required for an ROI Calculator?

The return amount, investment period, and total investment amount are the key inputs required by an ROI calculator.

Can an ROI Calculator be used for both financial and non-financial investments?

Yes. You can use the ROI calculator to calculate ROIs on investments made in financial markets and from other assets such as fixed deposits, gold, real estate, and commodities.

How can I interpret the results from an ROI Calculator?

Your investments are profitable when their ROI is positive. When it is zero, the investment was neither profitable nor lossmaking. When it is negative, the investment made a loss.

Can an ROI Calculator account for different periods?

Yes, an ROI calculator will take the investment period as one of the inputs and will show period-based metrics such as simple annual ROI and CAGR in addition to ROI.

Are there any limitations to using an ROI Calculator?

You can use an ROI calculator to calculate returns on lump sum investments. But you can not use it for multiple investments such as SIPs or irregular multiple investments.

How can an ROI Calculator help me make informed investment decisions?

Utilising an ROI calculator, you can assess the potential profitability of your investment choice. It helps determine whether your investment outperforms inflation, bank savings account yields, and returns from alternative potential investments.

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