Average Return on Investment Calculator

✖Total Value of Return represents the overall gain or loss on an investment over a specific period.ⓘ Total Value of Return [TVR]			+10% -10%
✖Total Number of Returns refers to the count of individual returns or instances within a dataset or time period.ⓘ Total Number of Returns [TNR]			+10% -10%

✖Average Return refers to the typical rate of return earned on an investment or portfolio over a specific period of time.ⓘ Average Return on Investment [AR]

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Formula

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Average Return on Investment

Formula

`"AR" = "modulus"("TVR")/"TNR"`

Example

`"97.5"="modulus"("780")/"8"`

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Average Return on Investment Solution

STEP 0: Pre-Calculation Summary

Formula Used

Average Return = modulus(Total Value of Return)/Total Number of Returns
AR = modulus(TVR)/TNR
This formula uses 1 Functions, 3 Variables

Functions Used

modulus - Modulus of a number is the remainder when that number is divided by another number., modulus

Variables Used

Average Return - Average Return refers to the typical rate of return earned on an investment or portfolio over a specific period of time.
Total Value of Return - Total Value of Return represents the overall gain or loss on an investment over a specific period.
Total Number of Returns - Total Number of Returns refers to the count of individual returns or instances within a dataset or time period.

STEP 1: Convert Input(s) to Base Unit

Total Value of Return: 780 --> No Conversion Required
Total Number of Returns: 8 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

AR = modulus(TVR)/TNR --> modulus(780)/8

Evaluating ... ...

AR = 97.5

STEP 3: Convert Result to Output's Unit

97.5 --> No Conversion Required

FINAL ANSWER

97.5 <-- Average Return

(Calculation completed in 00.004 seconds)

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Credits

Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Kashish Arora

Satyawati College (DU), New Delhi

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< 22 Investment Calculators

Portfolio Standard Deviation

Go Portfolio Standard Deviation = sqrt((Asset Weight)^2*Variance of Returns on Assets 1^2+(Asset Weight)^2*Variance of Returns on Assets 2^2+2*(Asset Weight*Asset Weight*Variance of Returns on Assets 1*Variance of Returns on Assets 2*Portfolio Correlation Coefficient))

Portfolio Variance

Go Portfolio Variance = (Asset Weight)^2*Variance of Returns on Assets 1^2+(Asset Weight)^2*Variance of Returns on Assets 2^2+2*(Asset Weight*Asset Weight*Variance of Returns on Assets 1*Variance of Returns on Assets 2*Portfolio Correlation Coefficient)

Jensen's Alpha

Go Jensen's Alpha = Annual Return on Investment-(Risk Free Interest Rate+Beta of the Portfolio*(Annual return of the market benchmark-Risk Free Interest Rate))

Compound Interest

Go Future Value of Investment = Principal Investment Amount*(1+(Annual Interest Rate/Number of Periods))^(Number of Periods*Number of Years Money is Invested)

Certificate of Deposit

Go Certificate of Deposit = Initial Deposit Amount*(1+(Annual Nominal Interest Rate/Compounding Periods))^(Compounding Periods*Number of Years)

Actuarial Method Unearned Interest Loan

Go Actuarial Method Unearned Interest Loan = (Number of Remaining Monthly Payments*Monthly Payment*Annual Percentage Rate)/(100+Annual Percentage Rate)

Equivalent Annual Annuity

Go Equivalent Annuity Cashflow = (Rate per Period*(Net Present Value (NPV)))/(1-(1+Rate per Period)^-Number of Periods)

Portfolio Expected Return

Go Portfolio Expected Return = Asset Weight*(Expected Return on Asset 1)+Asset Weight*(Expected Return on Asset 2)

Total Stock Return

Go Total Stock Return = ((Ending Stock Price-Initial Stock Price)+Dividend)/Initial Stock Price

Annuity Payment

Go Annuity Payment = (Rate per Period*Present Value)/(1-(1+Rate per Period)^-Number of Periods)

Value at Risk

Go Value at Risk = -Mean of Profit and Loss+Standard Deviation of Profit and Loss*Standard Normal Variate

Profitability Index

Go Profitability Index (PI) = (Net Present Value (NPV)+Initial Investment)/Initial Investment

Sharpe Ratio

Go Sharpe Ratio = (Expected Portfolio Return-Risk Free Rate)/Portfolio Standard Deviation

Capital Gains Yield

Go Capital Gains Yield = (Current Stock Price-Initial Stock Price)/Initial Stock Price

Treynor Ratio

Go Treynor's Ratio = (Expected Portfolio Return-Risk Free Rate)/Beta of the Portfolio

Average Return on Investment

Go Average Return = modulus(Total Value of Return)/Total Number of Returns

Information Ratio

Go Information Ratio = (Portfolio Return-Benchmark Return)/Tracking Error

Rate of Return

Go Rate of Return = ((Current Value-Original Value)/Original Value)*100

Straight Line Depreciation

Go Straight Line Depreciation = (Asset's Cost-Salvage)/Life

Portfolio Turnover Rate

Go Porfolio Turnover Rate = (Total Sales and Purchases of Shares/Average Net Assets)*100

Real Rate of Return

Go Real Rate of Return = ((1+Nominal Rate)/(1+Inflation Rate))-1

Risk Premium

Go Risk Premium = Return on Investment (ROI)-Risk Free Return

Average Return on Investment Formula

Average Return = modulus(Total Value of Return)/Total Number of Returns
AR = modulus(TVR)/TNR

What is Average Return on Investment?

Average Return on Investment provides investors with insights into how effectively their invested capital has generated returns relative to the initial investment. Typically expressed as a percentage, the average ROI indicates the average gain or loss on an investment relative to its cost.
To calculate the average ROI, one usually considers the total returns generated by an investment over a given period and divides it by the initial investment amount. This calculation provides a straightforward measure of the average return achieved per unit of investment. However, it's essential to note that the average ROI does not capture the full picture of an investment's performance, as it does not account for the time value of money, compounding effects, or the timing of cash flows.

How to Calculate Average Return on Investment?

Average Return on Investment calculator uses Average Return = modulus(Total Value of Return)/Total Number of Returns to calculate the Average Return, The Average Return on Investment is a fundamental metric used to assess the profitability of an investment over a specified period. Average Return is denoted by AR symbol.

How to calculate Average Return on Investment using this online calculator? To use this online calculator for Average Return on Investment, enter Total Value of Return (TVR) & Total Number of Returns (TNR) and hit the calculate button. Here is how the Average Return on Investment calculation can be explained with given input values -> 97.5 = modulus(780)/8.

FAQ

What is Average Return on Investment?

The Average Return on Investment is a fundamental metric used to assess the profitability of an investment over a specified period and is represented as AR = modulus(TVR)/TNR or Average Return = modulus(Total Value of Return)/Total Number of Returns. Total Value of Return represents the overall gain or loss on an investment over a specific period & Total Number of Returns refers to the count of individual returns or instances within a dataset or time period.

How to calculate Average Return on Investment?

The Average Return on Investment is a fundamental metric used to assess the profitability of an investment over a specified period is calculated using Average Return = modulus(Total Value of Return)/Total Number of Returns. To calculate Average Return on Investment, you need Total Value of Return (TVR) & Total Number of Returns (TNR). With our tool, you need to enter the respective value for Total Value of Return & Total Number of Returns and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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