Average returns are pretty easy to calculate, but not terribly specific (wouldn't you know it, finally an easy calculation and it's not accurate). This is the average of a series of returns, over a specific period of time. It's found by adding all the sums together, then dividing by however many periods you're measuring (you know, averaging).
Some of more common return measures used are Return on Assets (ROA), which is Net Income/Total Assets; Return on Investment (ROI), equation: (Gain from Investment - Cost of Investment)/Cost of Investment; and Return on Equity (ROE), equation: Net Income/Shareholder's Equity.
These different formulas are used based on whether you're measuring returns on an asset (something non-real estate you own), an investment (for example, shares in a business) or property you own.
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Finance: What Is a Real Return?67 Views
finance- a la shmoop. what is a real return? like is there a fake return? you
know like the news? well kinda .real return refers to an [man frowns talking to camera]
investment return mapped against inflation. so let's say you invest in a
bond that pays five percent a year for ten years and then pays you back your
principal .boring but nice- you know like a good doctor visit. your nominal return
over that period was 5% but since inflation was 3% a year during that
period on average your real return was only 2% a year- meaning that the
performance of your investment only eked out a 2% net gain against the price of [equation]
milk gas and you know knocked off iPhones. so don't be a chump who thinks
that they're making more money than they really are, and you know keep on keeping
it real. [man sitting in chair, talks to camera]
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