Calculating the Rate of Return on Investments

Let's say you invest $100 in stock, which is called your capital. One year later, your investment
yields $110. What is the rate of return of your investment? We calculate it by using the following
formula:

((Return - Capital) / Capital) × 100 = Rate of Return

Therefore,

(($110 - $100) / $100) × 100 = 10%

Your rate of return is 10%.

In your case, you have started with $10,000. Add up the current day’s value of your portfolio.
Divide the current day’s value by $10,000. That will give you the rate of return.

Calculating the Rate of Return on Investments by Week

Let's say the value of your portfolio last week, which is called your capital, is $10,430. This
week the value of your portfolio is $10, 580, which is called your return. What is the rate of
return of your investment for this last week? We calculate it by using the same formula:

((Return - Capital) / Capital) × 100 = Rate of Return

Therefore,

(($10,580 - $10,430) / $10,430) × 100 = 1.438%

Your rate of return is 1.438%

Doesn’t sound like much? Multiply 1.438% by 52 (number of weeks in a year). If you
maintained that growth rate, that is a 75% return on your investment in one year!! Without
compounding!