1. What Is Percentage Return?

Percentage return is a financial metric that measures the profitability of an investment relative to its initial cost. It expresses the gain or loss as a percentage of the original investment amount, making it easy to compare different investment opportunities.

2. How Does The Calculator Work?

The calculator uses the percentage return formula:

Where:

• \( Gain \) — The profit or loss from the investment (currency)
• \( Investment \) — The initial amount invested (currency)
• \( 100 \) — Conversion factor to express result as percentage

Explanation: This formula calculates what percentage of your original investment you gained or lost. A positive result indicates profit, while a negative result indicates loss.

3. Importance Of Return Calculation

Details: Calculating percentage return is essential for investment analysis, portfolio management, and financial planning. It helps investors evaluate performance, compare different investments, and make informed decisions about where to allocate capital.

4. Using The Calculator

Tips: Enter the gain (profit or loss) and the initial investment amount in any currency. Both values must be positive numbers, with investment greater than zero. The calculator will automatically compute the percentage return.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a good percentage return?
A: This varies by asset class and risk level. Generally, 7-10% annual return is considered good for stock investments, while 2-4% is typical for bonds. Higher returns usually come with higher risk.

Q2: How is percentage return different from absolute return?
A: Absolute return shows the actual monetary gain/loss, while percentage return shows the relative performance compared to the initial investment, making it better for comparisons.

Q3: Can percentage return be negative?
A: Yes, if the investment results in a loss (gain is negative), the percentage return will be negative, indicating you lost money relative to your initial investment.

Q4: Should I use this for annualized returns?
A: This calculator gives simple percentage return. For annualized returns over multiple periods, you would need to account for compounding using the CAGR formula.

Q5: Does this work for all types of investments?
A: Yes, this formula works for stocks, bonds, real estate, business investments, and any other scenario where you have an initial investment and a final gain/loss amount.