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Rate of return allows us to make clear comparisons among investments, which is essential. It puts them on a common scale.
Compound interest works by using the continual multiplication—or compounding—of an amount of money, over a set number of cycles, within a set period of time.
Simply put, the rate of return (ROR) is the gain or loss for any investment, in percentage terms, for a given period of time.
The APR takes into account interest rate and any fees a lender may charge for issuing a personal loan or mortgage, or for credit cards, any unpaid balance.
The Rule of 72 is an easy, concise equation that calculates the amount of time your investment will need to increase its value twofold.
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