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What is the nominal annual rate of return?

The nominal annual rate of return is calculated from the effective interest rate. It is typically a slightly lower percentage, and gives investors an idea of what their investment may return.


Are there any circumstances under which an investor might be more concerned about the nominal return on an investment than the real return?

circumstances: a. when investors calculate the tax on returns, they use nominal returns,because tax on nominal returns is less than real returns in order to adjust profits.


How do you Calculate a Return on an Investment?

The return on investment formula:ROI=(Gain from Investment - Cost of Investment)/Cost of Investment.


Can TVM be used to evaluate the real return or just the nominal return?

TVM, or Time Value of Money can certainly be used to calculate a real return. The only difference between a nominal return and a real return is inflation, so simply discount your future cash flows by anticipated inflation and you have a real return. In simpler terms assuming inflation is steady you could simply deduct inflation from your nominal return. For example a nominal 7% return with 3% inflation could be desribed as a 4% real return.


What is the difference between rate of return and return on investment?

The rate of return is a percentage that shows how much an investment has gained or lost over a specific period, while the return on investment is a ratio that compares the profit of an investment to its cost.


How is ROI or return on investment calculated?

Return on investment is calculated by subtracting investment capital from the return, taking into account inflation, taxation and the time frame involved.


How can I calculate the rate of return on my investment?

To calculate the rate of return on your investment, subtract the initial investment amount from the final value of the investment, then divide that result by the initial investment amount. Multiply the result by 100 to get the rate of return as a percentage.


How do you calculate the rate of return on an investment?

To calculate the rate of return on an investment, you subtract the initial investment amount from the final value of the investment, then divide that result by the initial investment amount. Multiply the result by 100 to get the percentage rate of return.


How can one calculate the holding period return for an investment?

To calculate the holding period return for an investment, subtract the initial investment amount from the final investment value, then divide by the initial investment amount. Multiply the result by 100 to get the percentage return.


Is it possible for the real interest rate to be negative?

Yes, it is possible for the real interest rate to be negative. This can occur when the nominal interest rate is lower than the inflation rate, resulting in a negative real return on an investment.


Return On Investment in fmcg?

Return on investment is the amount that you get back for investing in something. The formula is ROI=(Profit *100)/(Investment * number of years.)


What factors affect the rate of return of an investment at maturity?

What factors affect the rate of return of an investment at maturity?