What is returns? {with printable}

Returns is the money made or lost on an investment over a period of time.

A positive return on investment means you made money from your investment.

A negative return on investment means you lost money from your investment.

Returns is usually expressed in percentage form

If you invested $100 on a lemonade stand and after one month, you receive $120, it means you have made $20 profit. Your returns is $20/$100 * 100% = 20% per month.

Returns = profit / principal * 100%

Principal is the first amount of money invested

When we decide on what to invest on, one of the factors would be the returns on the investment. Typically, if all else equals (e.g. same amount of risk, etc), investors would choose to invest in a company (buy shares/stocks of a company) that gives higher returns.

Get the worksheet below to see if you really understand returns.