Annual rate of return

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Related to Annual rate of return: Average Annual Rate of Return

Annual rate of return

There are many ways of calculating the annual rate of return. If the rate of return is calculated on a monthly basis, we sometimes multiply this by 12 to express an annual rate of return. This is often called the annual percentage rate (APR). The annual percentage yield (APY) includes the effect of compounding interest.

Annual Percentage Rate

The cost of funds or interest rate for an entire year expressed as a single percentage. Significantly, the APR does not account for compounding. For example, if the APR is 36%, the percentage is 3% per month, but the interest rate or cost of funds for the entire year may be greater than 36% due to the effects of compounding. By law, a credit card company or other lender must inform the customer of the APR before any agreement is signed. The APR provides the customer with a convenient number against which to compare the cost of funds for other loans or investments. It is less commonly called the annual rate of return or the nominal annual rate.
References in periodicals archive ?
This purchase led to the repayment of our second lien, senior subordinated debt and PIK loan, generating proceeds of 45 million pounds Sterling, representing a 14% annual rate of return on our original investment.
Since January 2001, Barnegat is up 376%, a compound annual rate of return exceeding 18% per year.
5% monthly increase in April, as well as the highest annual rate of return amongst all 20 cities at +8.
He said the annual rate of return was 40-50 percent and offers unlimited opportunities for companies looking for safe haven for investment.
Chairman John Conlan said Chorion looked to achieve a 25 per cent annual rate of return between four to six months of a club opening, but Birmingham's Tiger Tiger has exceeded that target after a mere two weeks.
LaBarbera figures she's had a 19 percent average annual rate of return.
Continue to assume this contribution earns a 10% annual rate of return for 10 years before it is withdrawn in the year 2000 when the taxpayer's marginal rate is 70% (as it was in the preceding example, but in this case the higher effective marginal rate is in the withdrawal year instead of the contribution year).
Since our launch in 2001, we are up 337% over 9 years, which equates with a compound annual rate of return of 18%/yr.
You can expect an annual rate of return of 15% to 18% on your investment.
If you're planning to leave your money in an IRA for 10 or more years, it's not hard to get a 10 to 12 percent annual rate of return on a mutual fund, he said.
The difference in the annual rate of return between the IRA contribution and the taxable retirement fund increases with either a higher marginal tax rate or a higher rate of return on the invested funds.
National Home Price Index fell in the fourth quarter of 2009 but has improved in its annual rate of return, as compared to what was reported in the third quarter.

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