Total Rate of Return Calculator

Total Rate of Return Formula:

\[ TRR = \frac{P_{new} - P_{old} + D}{P_{old}} \times 100 \]

Total Rate of Return (%):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Total Rate of Return (TRR)?

Definition: TRR measures the overall percentage return on an investment, including both capital gains and dividends.

Purpose: It helps investors evaluate the complete performance of their investments over time.

2. How Does the Calculator Work?

The calculator uses the formula:

\[ TRR = \frac{P_{new} - P_{old} + D}{P_{old}} \times 100 \]

Where:

\( TRR \) — Total Rate of Return (%)
\( P_{new} \) — Current price of investment (USD)
\( P_{old} \) — Original purchase price (USD)
\( D \) — Dividends received during holding period (USD)

Explanation: The formula calculates percentage gain/loss including both price changes and dividend income.

3. Importance of TRR Calculation

Details: TRR provides a comprehensive view of investment performance, essential for comparing different investments and making informed decisions.

4. Using the Calculator

Tips: Enter the current price, original purchase price, and total dividends received. Original price must be > 0.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between TRR and simple return?
A: Simple return only considers price changes, while TRR includes dividends and other income.

Q2: Should I include reinvested dividends?
A: Yes, include all dividends whether taken as cash or reinvested.

Q3: How does TRR account for time period?
A: This calculator gives absolute return. For annualized return, you'd need to factor in holding period.

Q4: What if my investment lost value?
A: The calculator works for both gains and losses (negative returns).

Q5: Can I use this for multiple investments?
A: Yes, but calculate each investment separately for accurate comparison.