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Rate of Return Calculator

Rate of Return Calculator


What is a Rate of Return?

Rate of return is a financial calculation used when determining the time value of money to determine the interest rate that a flow of money compounds at each time period.
It takes into consideration a value at the moment (present value) as well as at a time in the future (future value) as well any payments regularly occurring each compounding period.
As this calculator is structured to parallel the results of a financial calculator, inputs and outputs will be similar – for example, a negative present value (or payment) means an outflow as opposed to a directly negative number.

How is the Rate of Return calculated?

Rate of return is calculated through a financial formula used to determine the time value of money.

What is Present Value?

Future Value (FV) is the total value at the end of the time period.

What is Future Value?

Future Value (FV) is the total value at the end of the time period.

What are periods?

Periods are the number of times that compounding (and payments) take place.

What is Payment (PMT)?

A payment is an amount either deposited or withdrawn at each compounding period. A negative number designates an amount that is deposited, while a positive one withdrawn. For example, if $100 is deposited each compounding period, it would be entered as '-100', while if $75 was payed out each compounding period, it would be entered as '75'.

What is Payments at start or end of period?

A payment at the beginning of a period would mean that the payment (or deposit) occurs at the beginning of each period. A payment at the end of a period would mean that the payment (or deposit) occurs at the end of each period.

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