Rate of Return Calculator
If you are curious to know about your investment's annual return, will it be in the form of profit or loss? Then you can use our rate of return calculator.
In simple words, a return rate is the output that an investor gets from the investment he/she made. That's why it is much similar to return on investment. In finance, The return rate is the amount of money an investor receives after a specific period from the investment he made. However, If the rate of return is negative, then an investor is at a loss. Or If the rate of return is positive, then an investor is at a profit. Note that a rate of return is calculated in percentage, which means it indicates the value of profit or loss in the form of a percentage, e.g., 110%, -340%.
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Formula of Rate of Return Calculator
To calculate the return rate, you can use our rate of return calculator, or you can find it manually using the formula listed below.
Rate of return = (final amount obtained - initial value) / initial value
Whereas,
The final amount is the amount an investor gets after withdrawing its investment.
The initial value or initial amount is an amount that the investor pays in investment.
Note:
To calculate the rate on equity, you can use our Rate On Equity Calculator.
Example
Suppose a boy invested $10 in shares, and the price of shares rises to $15, with a $1 dividend is paid during that period. Find the ROR a boy will receive after withdrawing his investment.
Given data
Initial amount= $10
Final amount = $15
Dividend = $1
To Find
Rate of return = ?
Solution
By using the above formula, you can find the rate of return earned by the boy.
Rate of return = (final amount obtained - initial value) / initial value
Putting values in the formula:
Rate of return = ((15+1+10) / 10) * 100 = 60%
Here we will add the dividend value as well in the formula because it must be included in the final value.
How to use the Rate of Return Calculator?
The steps to use the rate of return calculator are as follows:
Step 1: Enter a current value in the first required input.
Step 2: Enter the original value in the second required input.
Step 3: The calculator will automatically display an answer on the screen.
Calculator use
You can use our rate of return calculator to find the solution quickly. Just enter the required values, and it will display the answer on the screen.
