Rate of return

The investor's return on an investment, expressed as a proportion of the amount invested.

Most commonly expressed as a percentage.

Example

GBP 1 million is invested.

GBP 1.03 million is repayable at the end of the period.

The rate of return per period (r) is:

r = (End amount / Start amount) - 1

Which can also be expressed as:

r = (End / Start) - 1

or

r = <math>\frac{End}{Start}</math> - 1

= <math>\frac{1.03}{1}</math> - 1

= 0.0300

= 3.00%

See also