1. What is Return on Equity Investment?

Return on equity investment measures the percentage gain or loss made on an investment relative to the original amount invested. It's a fundamental metric for evaluating investment performance.

2. How Does the Calculator Work?

The calculator uses the simple return formula:

Where:

• Ending Value — Current value of the investment
• Beginning Value — Original investment amount

Explanation: The formula calculates the percentage change in value from the initial investment to the current value.

3. Importance of Return Calculation

Details: Calculating returns helps investors evaluate performance, compare different investments, and make informed decisions about portfolio allocation.

4. Using the Calculator

Tips: Enter the original investment amount and current value in dollars. Both values must be positive numbers, with beginning value greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good return on investment?
A: This varies by asset class and market conditions, but historically, 7-10% annual return is considered good for stock investments.

Q2: Does this calculator account for dividends?
A: No, this calculates simple price return. For total return (including dividends), add reinvested dividends to the ending value.

Q3: How does this differ from annualized return?
A: This shows total return for the period. Annualized return adjusts for the investment duration to show equivalent yearly return.

Q4: Can I use this for multiple investments?
A: For a portfolio, sum all beginning and ending values before calculating.

Q5: What if my return is negative?
A: A negative return indicates a loss on your investment.