1. What is Investment Return?

Investment return measures the gain or loss generated on an investment over a period of time, expressed as a percentage of the investment's initial cost. It's a fundamental metric for evaluating investment performance.

2. How Does the Calculator Work?

The calculator uses the basic return formula:

Where:

• \( End\ Value \) — Current or final value of the investment
• \( Start\ Value \) — Initial investment amount

Explanation: The formula calculates the relative change in value from the beginning to the end of the investment period.

3. Importance of Return Calculation

Details: Calculating investment returns helps investors assess performance, compare different investments, and make informed decisions about portfolio allocation.

4. Using the Calculator

Tips: Enter the initial investment amount and current value in USD. The calculator will compute both decimal and percentage returns.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple return and annualized return?
A: Simple return measures total gain/loss over the entire period, while annualized return shows the average yearly return.

Q2: How do I interpret negative returns?
A: A negative return indicates a loss on your investment.

Q3: Should I include dividends in the end value?
A: For total return calculations, yes - include all cash flows like dividends and interest.

Q4: What's considered a good investment return?
A: This depends on the asset class and risk profile. Historically, stocks average 7-10% annually.

Q5: How does inflation affect returns?
A: The calculator shows nominal returns. For real returns, you'd need to adjust for inflation.