How is the Rate of Return Calculated

Rate of Return Calculator

The Rate of Return (RoR) is a performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. It is expressed as a percentage and represents the gain or loss generated on an investment over a specific period. A positive RoR indicates a profitable investment, while a negative RoR signifies a loss.

.roi-calculator { font-family: sans-serif; border: 1px solid #ccc; padding: 20px; border-radius: 8px; max-width: 500px; margin: 20px auto; background-color: #f9f9f9; } .roi-calculator h2 { text-align: center; color: #333; margin-bottom: 15px; } .calculator-inputs { margin-bottom: 20px; } .input-group { margin-bottom: 15px; } .input-group label { display: block; margin-bottom: 5px; font-weight: bold; color: #555; } .input-group input { width: calc(100% – 12px); padding: 8px; border: 1px solid #ddd; border-radius: 4px; box-sizing: border-box; } .calculator-result { margin-top: 20px; padding: 15px; background-color: #e8f5e9; border: 1px solid #c8e6c9; border-radius: 4px; text-align: center; font-size: 1.1em; color: #2e7d32; font-weight: bold; } button { display: block; width: 100%; padding: 10px 15px; background-color: #4CAF50; color: white; border: none; border-radius: 4px; font-size: 1em; cursor: pointer; transition: background-color 0.3s ease; } button:hover { background-color: #45a049; } function calculateRoR() { var initialInvestment = parseFloat(document.getElementById("initialInvestment").value); var finalValue = parseFloat(document.getElementById("finalValue").value); var timePeriod = parseFloat(document.getElementById("timePeriod").value); var resultDiv = document.getElementById("result"); if (isNaN(initialInvestment) || isNaN(finalValue) || isNaN(timePeriod) || initialInvestment <= 0 || timePeriod <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; resultDiv.style.backgroundColor = "#ffebee"; resultDiv.style.borderColor = "#ef9a9a"; resultDiv.style.color = "#c62828"; return; } // Formula for Rate of Return: ((Final Value – Initial Investment) / Initial Investment) * 100 var profitOrLoss = finalValue – initialInvestment; var rateOfReturn = (profitOrLoss / initialInvestment) * 100; // Formula for Annualized Rate of Return: ((Final Value / Initial Investment)^(1/Time Period) – 1) * 100 var annualizedRateOfReturn = (Math.pow((finalValue / initialInvestment), (1 / timePeriod)) – 1) * 100; resultDiv.innerHTML = "Rate of Return: " + rateOfReturn.toFixed(2) + "%" + "Annualized Rate of Return: " + annualizedRateOfReturn.toFixed(2) + "%"; resultDiv.style.backgroundColor = "#e8f5e9"; resultDiv.style.borderColor = "#c8e6c9"; resultDiv.style.color = "#2e7d32"; }

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