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Understanding Investment Yield

When you evaluate an investment, you may see several ways to describe performance. Profit, absolute return and annualized yield answer related but different questions.

Profit

Profit is the difference between the amount you receive and the amount you invested, before considering any additional costs or taxes.

Absolute return

Absolute return expresses the gain or loss as a percentage of the invested amount. It does not account for how long the money was invested.

Annualized return

Annualized return converts a result over a period into an annualized figure. This makes it easier to compare investments held for different lengths of time, although the calculation is still based on historical or assumed values.

Example

If ₹1,00,000 becomes ₹1,21,000, the profit is ₹21,000 and the absolute return is 21%. If the investment took several years, the annualized return would be lower than 21%.

Use the yield calculator

Enter the invested amount, final value and holding period to estimate profit, absolute return and annualized return.

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This guide is for educational purposes only. Calculator results are estimates based on the inputs and assumptions you provide and should not be treated as guaranteed returns or personalized financial advice.