1. What is Yield on Investment?

Yield on Investment measures the percentage return on an investment relative to its initial cost. It helps investors evaluate the performance of their investments and compare different investment opportunities.

2. How Does the Calculator Work?

The calculator uses the yield formula:

Where:

• \( A \) — Final amount received from the investment ($)
• \( P \) — Principal amount invested ($)

Explanation: The formula calculates the percentage gain (or loss) by comparing the difference between final and principal amounts to the original investment.

3. Importance of Yield Calculation

Details: Yield calculation is essential for investment analysis, portfolio management, and financial planning. It helps investors make informed decisions about where to allocate their capital.

4. Using the Calculator

Tips: Enter the original investment amount (principal) and the final amount received. Both values must be positive numbers (final amount can be zero if total loss).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between yield and ROI?
A: Yield typically refers to income return (like dividends or interest), while ROI (Return on Investment) includes both income and capital gains.

Q2: Can yield be negative?
A: Yes, a negative yield indicates a loss on the investment where the final amount is less than the principal.

Q3: How does this differ from annualized yield?
A: This calculates simple yield. Annualized yield accounts for the investment period and compounds returns.

Q4: What's considered a good yield?
A: This depends on the asset class and risk profile. Generally, higher yields indicate better returns but may come with higher risk.

Q5: Should I include fees in the calculation?
A: For accurate results, use net amounts after deducting any fees or commissions from the final amount.