LIC ROI Calculator
Evaluate the absolute efficiency and growth multiplier of any financial investment or premium portfolio.
₹50,000
Net gain on original invested capital.
• Absolute ROI reflects simple growth without accounting for the duration of holding.
• Annualised ROI (CAGR) calculates compounding growth over the holding years, allowing direct comparison with alternative instruments like mutual funds.
Understanding ROI
Return on Investment (ROI) is a widely used financial ratio to assess investment profitability. It measures the net return relative to the initial purchase price or investment cost.
- ROI Formula: ROI = ((Ending Value - Beginning Value) / Beginning Value) * 100
- Utility: Helps investors compare asset efficiency across portfolios.
Annualised vs Absolute ROI
Absolute ROI reflects cumulative gains, whereas Annualised ROI adjusts returns to a single-year basis, which is key when comparing investments held for different time horizons.
Frequently Asked Questions (FAQ)
What is a good ROI for conservative investment portfolios?
Conservative sovereign-backed investments usually yield between 5.5% to 7.5% annually. High-risk equity investments aim for 12% to 15%.
Does ROI take taxes or transaction charges into account?
Simple ROI does not automatically deduct taxes or fees. Net ROI should deduct tax liabilities and charges from ending value before division.
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