Rate of return: Difference between revisions

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imported>Doug Williamson
(Link with Periodic rate page.)
imported>Doug Williamson
(Add example.)
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The return on an investment expressed as a proportion of the amount invested.
The investor's return on an investment expressed as a proportion of the amount invested.


Most commonly expressed as a percentage.
Most commonly expressed as a percentage.
<span style="color:#4B0082">'''Example'''</span>
GBP 1 million is invested.
GBP 1.03 million is repayable at the end of the period.
The periodic rate of return (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
= 0.03
= '''3%'''





Revision as of 13:42, 17 November 2015

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 periodic rate of return (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

= 0.03

= 3%


See also