How Do You Calculate Total Return Percentage Complete Guide

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how do you calculate total return percentage. An example Lets say that you want to calculate the return of the SP 500 index during the month of October 2015. Step 1 Determine the cost of the investment.

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Plugging the same numbers into the formula for calculating annualized total return looks like this. It is most commonly measured as net income divided by the original capital cost. Therefore Adam realized a 35 return on his shares over the two-year period.

In the year the investment lost 20 you have 80 of the balance from the end of the first year which is why you multiply by 80.

In order to do this you must first calculate the total amount of income earned for the investment over a given time period. Ending stock price number of shares currently owned - starting stock price number of shares initially purchased other cash distributions received starting stock price number of shares initially purchased 100 This formula produces the percentage return. Then determine the closing or present value of total assets which is the sum of all the investments. Plug all the numbers into the rate of return formula.