Simple rate of return


 

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Simple rate of return

The return from investments figured by dividing income plus capital gains by the amount of capital invested. The effect of compounding is not taken into account.



Simple rate of return

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Interest, normally paid annually, which is earned on deposited capital only. Unlike compound interest, the annual interest is not added to the capital. For example, if the capital deposited is £1,000 and the interest rate is £80, you would receive £80 at the end of the first year and at the end of the second year. This contrasts with compound interest, where the £80 interest earned on the first year would be added to the original capital, and the amount of money earning interest in the second year would be £1,080.00.


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An estate under which the owner owns a contract interest in the property and is entitled to the unrestricted enjoyment of the property, including the right to dispose property.


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