# Rate of Return Question - Posted by Brandt Frederick

Posted by Ben on December 17, 1999 at 08:06:09:

I am no cash flow expert but I think I can handle this. Assume you held this for a year instead of four months you would have made \$12,000 (simple interest without compounding etc). 12,000 divided by 11,000 is 1.09. Actually these questions are better suited for the cash flow forum but while we are on the topic, I have always found this annualized ROI to be very misleading. In other words, if I invest a dollar today and get back two dollars tomorrow, my annualized yield is 365% right which sounds great except I have still made a dollar, big deal! How does one calculate a return that is more accurate?

Rate of Return Question - Posted by Brandt Frederick

Posted by Brandt Frederick on December 17, 1999 at 07:11:37:

I have a simple question concerning the calculation of return on invested funds. If I invest \$11,000 and four (4) months later I receive my original investment of
\$ 11,000. back along with \$ 4,000 return on my investment, what is my percentage return on an annual basis?