1. What is Total Return?

Total return measures the overall performance of an investment, including both capital appreciation (price changes) and income (dividends). It provides a complete picture of investment performance.

2. How Does the Calculator Work?

The calculator uses the total return formula:

Where:

• Price Appreciation — Current value minus initial investment
• Dividends — All dividends received during holding period
• Initial Investment — Original amount invested

Explanation: The equation accounts for both the growth in investment value and any income generated.

3. Importance of Total Return Calculation

Details: Total return is the most comprehensive way to measure investment performance as it includes all sources of return. It allows for accurate comparison between different investments.

4. Using the Calculator

Tips: Enter initial investment in USD, price appreciation (can be negative for losses), and total dividends received. All values must be valid (initial investment > 0).

5. Frequently Asked Questions (FAQ)

Q1: Why include dividends in return calculations?
A: Dividends are part of the investment's total return. Ignoring them would understate the true performance of dividend-paying investments.

Q2: How does this differ from price return?
A: Price return only considers capital gains/losses, while total return includes both price changes and dividends.

Q3: Should I use this for all types of investments?
A: This is most relevant for stocks and other investments that pay dividends. For non-dividend investments, price return alone may be sufficient.

Q4: How do I annualize the return?
A: To annualize, you'll need to know the holding period and use the formula: (1 + total_return)^(1/years) - 1.

Q5: What about reinvested dividends?
A: This calculator shows simple total return. For compound return with reinvested dividends, you'd need more complex calculations.