MathLiveRate of return
Gives the profit earned on an investment as a fraction of the capital put into it. It is used to compare the profitability of different investments.
\text{Rate of return} = \frac{\mathrm{profit}}{\mathrm{capital}}What the symbols mean
| economic profit gained from the investment, in currency units | |
| capital invested, in currency units |
About this formula
- FieldEconomics and finance
- TopicInvestment analysis
- LevelHigh school
- Also calledreturn on investment, investment return, financial return, general profitability, ROI ratio, profit divided by capital
- SourceWikidata Q7317264
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