Rate of Return Calculator

# Rate of Return Calculator

Rate of Return is equal to Final amount received (INR)less than initial value(INR) divided initial value. The **cost of investment** or *initial value* and the **received final amount**.

**Formula us,**

rate of return = (final amount received – initial value) / initial value

**Let us consider,**

- The rate takes a negative form, we have a negative return, representing a loss on the investment, assuming the amount invested is greater than zero.
- The time length and effect of reinvested return, in particular the compounding frequency, things become tricky.The best way to get familiar with this tool is to consider three real-life examples. To simplify things, all the following examples involve yearly compounding and annual cash flows (if applicable).

**Calculate the rate of return with positive cash flows**

**Example 1**

1,000 a professional investor. During these 10 years, Steve gave his brother 100 dollars at end of each year, and now his brother has return 5,000 dollars to him.

The precise answer is 12.379%,

The initial investment to $1,000 with a final amount of $5,000, 10 years investment length, and $100 periodic deposit.