Metrics & Calculations
Important financial metrics and formulas for informed decisions.
Annualized Rate of Return
The average annual growth rate of an investment, calculated using initial and final values over the holding period.
Compound Interest
Interest calculated on the initial principal and accumulated interest of previous periods, resulting in exponential growth over time.
Depreciation
The decrease in value of assets over time due to wear and tear, obsolescence, or market changes that affects net worth.
Net Worth
The difference between your total assets and total liabilities, representing your overall financial position and wealth.
Return on Investment (ROI)
The profitability of an investment relative to its cost, calculated as the gain divided by the investment cost, expressed as a percentage.
Savings Rate
The percentage of income saved rather than spent, calculated as savings divided by gross or net income.