1. What is ROI?

ROI (Return on Investment) is a financial metric used to evaluate the efficiency of an investment or compare the efficiency of several different investments. It measures the amount of return on an investment relative to the investment's cost.

2. How Does the Calculator Work?

The calculator uses the ROI formula:

Where:

• \( Gain \) — The amount of money earned from the investment (₹)
• \( Cost \) — The initial amount invested (₹)

Explanation: The formula calculates the percentage return relative to the initial investment amount.

3. Importance of ROI Calculation

Details: ROI helps investors determine which investment opportunities are most profitable, compare different investments, and make informed financial decisions.

4. Using the Calculator

Tips: Enter the total gain (returns) in Indian Rupees (₹), the initial investment cost in ₹. Cost must be greater than zero for accurate calculation.

5. Frequently Asked Questions (FAQ)

Q1: What is a good ROI percentage?
A: A good ROI depends on the investment type and risk. Generally, 7-10% is considered good for low-risk investments in India.

Q2: Can ROI be negative?
A: Yes, negative ROI means the investment resulted in a loss (gain was less than cost).

Q3: How is ROI different from profit?
A: Profit is absolute (gain - cost), while ROI shows the relative return as a percentage of the cost.

Q4: Does this calculator account for time?
A: No, this calculates simple ROI. For annualized ROI (accounting for time), you'd need additional calculations.

Q5: What are typical ROI ranges in India?
A: In India, FD returns average 6-7%, mutual funds 10-15%, real estate 8-12%, and stocks can vary widely.