Average Rate of Return Calculator

The Average rate of return is the amount of profit, an individual can expect based on an investment made. It is the gain or loss on an investment over a specific period of time. Find your ARR for the given selling price, original cost and the number of years holding the stock in the below average rate of return calculator. Enter the selling price, original cost and number of years in this average rate of return calculator to know the resultant value of ARR.

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Formula:

Average Rate of Return (ARR) = ((s - o) / o) × 100 Average Rate of Return for Every Year =( ((s - o) / o) / a) × 100 Where, S = Selling Price O = Original Cost A = Number of years to hold the Stock

Example:

A person purchases an apartment holding the stock for five years. The original cost of an apartment is Rs. 1,00,000 then he sells after 5 years for Rs. 1,30,000. Find his accounting rate of return.

Solution:

ARR =( (130000 - 100000) / 100000)×100
=30%
Average Rate of Return for Every Year =( ((130000 - 10000) / 100000 ) / 5)×100
= 6%

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