.ror-calculator-container {
font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif;
max-width: 800px;
margin: 0 auto;
padding: 20px;
background-color: #f9f9f9;
border: 1px solid #e0e0e0;
border-radius: 8px;
}
.ror-calculator-container h2 {
text-align: center;
color: #333;
margin-bottom: 25px;
}
.ror-form-group {
margin-bottom: 20px;
}
.ror-form-group label {
display: block;
margin-bottom: 8px;
font-weight: 600;
color: #444;
}
.ror-form-group input {
width: 100%;
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
}
.ror-btn {
display: block;
width: 100%;
padding: 14px;
background-color: #2c7a7b;
color: white;
border: none;
border-radius: 4px;
font-size: 18px;
font-weight: bold;
cursor: pointer;
transition: background-color 0.3s;
}
.ror-btn:hover {
background-color: #235c5d;
}
.ror-results {
margin-top: 30px;
padding: 20px;
background-color: #ffffff;
border: 1px solid #ddd;
border-radius: 4px;
display: none;
}
.ror-result-row {
display: flex;
justify-content: space-between;
padding: 10px 0;
border-bottom: 1px solid #eee;
}
.ror-result-row:last-child {
border-bottom: none;
}
.ror-result-label {
color: #666;
}
.ror-result-value {
font-weight: bold;
color: #333;
}
.ror-highlight {
color: #2c7a7b;
font-size: 1.2em;
}
.ror-article-content {
margin-top: 50px;
line-height: 1.6;
color: #333;
font-family: sans-serif;
}
.ror-article-content h3 {
color: #2c7a7b;
margin-top: 30px;
}
.ror-article-content p {
margin-bottom: 15px;
}
.ror-formula-box {
background-color: #edf2f7;
padding: 15px;
border-left: 4px solid #2c7a7b;
margin: 20px 0;
font-family: monospace;
font-size: 1.1em;
}
function calculateRateOfReturn() {
var initial = parseFloat(document.getElementById('initialInvestment').value);
var finalVal = parseFloat(document.getElementById('finalValue').value);
var dividends = parseFloat(document.getElementById('cashFlow').value);
var years = parseFloat(document.getElementById('timePeriod').value);
var resultsDiv = document.getElementById('rorResults');
if (isNaN(initial) || isNaN(finalVal) || initial === 0) {
alert("Please enter valid numbers for Initial Investment and Final Value. Initial Investment cannot be zero.");
return;
}
if (isNaN(dividends)) {
dividends = 0;
}
if (isNaN(years)) {
years = 0;
}
// Calculation Logic
var totalGain = (finalVal – initial) + dividends;
var simpleRoi = (totalGain / initial) * 100;
var annualizedReturn = 0;
// CAGR Logic: ((Final + Dividends) / Initial) ^ (1/n) – 1
// Note: This treats dividends as if they were added to the final value at the end.
if (years > 0) {
var totalValue = finalVal + dividends;
// Handle negative total value edge case for power calculation
if (totalValue > 0 && initial > 0) {
var cagr = (Math.pow((totalValue / initial), (1 / years)) – 1) * 100;
annualizedReturn = cagr;
} else {
annualizedReturn = 0; // Cannot calculate CAGR with negative base usually
}
} else {
// If years is 0 or empty, annualized return is same as simple ROI (instantaneous)
annualizedReturn = simpleRoi;
}
// Formatting
document.getElementById('netProfit').innerHTML = "$" + totalGain.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('simpleRoi').innerHTML = simpleRoi.toFixed(2) + "%";
document.getElementById('annualizedReturn').innerHTML = annualizedReturn.toFixed(2) + "%";
resultsDiv.style.display = 'block';
}
How to Calculate My Rate of Return
Calculating your rate of return (RoR) is essential for evaluating the performance of any investment, whether it's stocks, real estate, or a small business. It tells you exactly how much money you made or lost relative to the amount you invested.
The Basic Rate of Return Formula
The simplest way to calculate your return is using the basic Return on Investment (ROI) formula. This method considers your initial cost, the final value, and any income generated (like dividends or rent) during the holding period.
RoR = [(Current Value – Initial Value + Income) / Initial Value] × 100
For example, if you bought a stock for $1,000, sold it for $1,200, and received $50 in dividends:
- Profit: ($1,200 – $1,000) + $50 = $250
- Calculation: ($250 / $1,000) × 100
- Rate of Return: 25%
Simple Return vs. Annualized Return (CAGR)
While the simple rate of return gives you the total percentage gain, it doesn't account for time. A 20% return over 1 year is fantastic, but a 20% return over 10 years is poor. This is where the Annualized Return, often referred to as the Compound Annual Growth Rate (CAGR), becomes useful.
The calculator above provides both metrics:
- Simple ROI: Useful for short-term trades or simple snapshots of total growth.
- Annualized Return: Essential for comparing investments held for different lengths of time. It smooths out the returns as if they grew at a steady rate every year.
Why Include Dividends and Cash Flow?
Many investors make the mistake of looking only at price appreciation (Capital Gains). However, for assets like dividend-paying stocks or rental properties, cash flow is a massive component of the total return. Failing to include the "Dividends & Income Received" field in your calculation will result in underestimating your true investment performance.
Frequently Asked Questions
What is a good rate of return?
Historically, the S&P 500 has returned about 10% annually on average before inflation. A "good" return depends on your risk tolerance; safer investments (like bonds) typically offer lower returns (3-5%), while riskier ones target 10% or higher.
Can rate of return be negative?
Yes. If your final value plus income is less than your initial investment, you have a negative rate of return, indicating a financial loss.