Financial Terms / rate of return

What is Rate of Return?

The rate of return is a percentage of an investment's initial value, giving an indication of the investment's performance.

Formula

``Rate of Return = (Final Value - Initial Value) / Initial Value``

How do I calculate the rate of return?

`When calculating the rate of return of an investment, it is important to use the initial cost of the investment as a baseline. To calculate the rate of return, use the formula `Rate of Return = (Final Value - Initial Value) / Initial Value` where the final value is the current market value of the investment. To ensure accuracy, it is advisable to use Sourcetable to input the data and calculate the rate of return.`

What is the Rate of Return?

`The rate of return is a measure of the profitability of an investment over a specific period of time. It is calculated by dividing the total gain or loss on an investment by the initial investment cost.`

What types of investments can the rate of return be applied to?

`The rate of return can be applied to real estate, bonds, stocks, and fine art investments.`

What is the formula for calculating the rate of return?

`The formula for calculating the rate of return is `Rate of Return = (Gain or Loss / Initial Investment Cost) * 100`.`

Key Points

How do I calculate rate of return?
`Rate of Return = (Final Value - Initial Value) / Initial Value`
Calculating the Rate of Return
The rate of return is calculated as a percentage of the investment's initial value. This percentage is determined by taking the total return (profit or loss) of the investment, divided by the initial investment cost.
Where the Rate of Return Can Be Used
The rate of return can be used to measure the performance of any investment vehicle, such as stocks, bonds, mutual funds, or real estate.