Q:
# What is the formula for the rate of return?

**To determine the rate of return, (W) = change in X, t= at time t, the formula would be %W = ((X*t)-(X*t)-1) divided by (X*t)-1.** The return on investment (ROI) must first be determined to solve this formula. The ROI is determined by subtracting the initial investment from the earnings, then dividing that number by the initial investment.

The rate of return is the percentage rate of return that is earned from investments and earnings. Once earnings are calculated, the rate of return can be determined. The formula is %W = ((X*t)-(X*t)-1) divided by (X*t)-1, with X being the amount difference between investments and earnings. This formula is called the rate of return formula in finance, but in math it is called the percentage change" formula. This formula is equal to percent change = (later - earlier) / earlier times 100 percent.

The return on investment can have a different formula for different investments, such as business investment versus real estate investment. The rate of return can also vary day by day, as the daily earnings can fluctuate, so this formula may have a different amount every day. A simpler method of figuring out the rate of return is to guess a percentage based on assumptions determined by the numbers. In addition to the general rate of return, there is an internal rate of return, or IRR, which is the interest rate that makes the net present value, or NPV equal zero.

Learn more about Investing-
Q:
## How does someone calculate the early withdrawal penalties for a 401(k)?

A: Calculating the penalties of an early withdrawal from a 401(k) is done using the amount a person wants to withdraw, federal income tax rate, state income t... Full Answer >Filed Under: -
Q:
## What are the pros and cons of investing in annuities?

A: Benefits of annuities include that they accrue tax-free and often come with death benefits, which means that should an investor die before cashing annuitie... Full Answer >Filed Under: -
Q:
## What is a lifetime annuity rate?

A: A lifetime annuity rate pertains to the annual rate of return that a lifetime annuity provides for the remainder of an investor's life. A lifetime annuity ... Full Answer >Filed Under: -
Q:
## What is the annual return of the S&P 500 over the last four years?

A: The average return rate for the S&P 500 from 2010 to 2014 was 15.81 percent, or 13.92 percent when factoring in account inflation. The S&P 500 is an index ... Full Answer >Filed Under: