About Rate of Return Formula
The rate of return formula is used to determine the overall return on investment over time. Returns can be either profitable or unprofitable. It is known as ROR and is stated as a percentage. The profit or loss of an investment over a specific period stated as a percentage of the investment's initial cost is referred to as the rate of return (RoR). The rate to return formula calculates the percentage change from the start to the end of a period. If the rate of return formula returns a positive result, the investment has made a profit or gain. A negative rate of return formula value indicates that the invested amount has lost money. The formula for calculating the rate of return is as follows:
Rate of Return = [(Current Value - Original Value)/ Original Value]× 100
R=Vc−Vo / Vo
where,
- Vc= Current value
- Vo= Original value
where,
- Vc= Current value
- Vo= Original value
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