Simple English definitions for legal terms
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Rate of return refers to the amount of money earned from an investment each year, expressed as a percentage of the initial investment. It helps investors understand how much profit they can expect to make from their investment. A fair rate of return is the amount of profit that a public utility is allowed to earn, as determined by a public utility commission. Internal rate of return is a method used to evaluate the actual return on a long-term investment.
Rate of return refers to the percentage of annual income earned from an investment. It is a measure of the profitability of an investment and is calculated by dividing the annual income by the amount of the investment.
These examples illustrate how rate of return is calculated and how it can be used to evaluate the profitability of different investments.