What formula do I use to calculate the interest earned on my investments over the past 12 months?
Daryl Ducasse of Merkurius Capital Solutions responds:
The simplest formula to use is to subtract the original (principal) investment amount from the year-end (terminal) investment value.
For example: Terminal = R110,000; principal = R100,000; difference = R10,000.
The total "interest" earned, therefore, would be R10 000. The return calculation is 10 000/100 000 = 0.10 or 10.00%.
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