Rate of Return. Definition. The Rate of Return (ROR) is: A percentage (or interest rate) that describes the merit of an investment. (Return on investment during a year)/(Amount Invested) The interest rate than makes the cash flows of income equivalent to the cash flows of cost. Usage.
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The Rate of Return (ROR) is:
= 0.09 + [(5.603)/(5.603- (-3.614))](0.1-0.09)
= 0.09608 or 9.608%
175x2 + 150x -200 = 0
NAW = - 100(A/P, 0.09, 10) + 16 = 0.418
NAW = - 100(A/P, 0.10, 10) + 16 = -0.275
ROR = 0.08 + [18.2144 /(18.2144+4.9984)](0.1-0.08)
= 0.09569 or 9.569%