###### Asked in Investing and Financial MarketsEconomicsFinancial Statements

Investing and Financial Markets

Economics

Financial Statements

# What does a rate of return of negative 100 mean?

## Answer

###### Wiki User

###### December 09, 2010 8:59PM

A negative rate of return means that you lost money on the account. The value of your account decreased by that rate. It's not clear how that relates to your equity, which you say increased. As far as how you lost money, I can't say without seeing yourbalance sheet.

## Related Questions

###### Asked in Business & Finance

### Formula for calculating returns?

In finance, rate of return (ROR), also known as return on
investment (ROI), rate of profit or sometimes just return, is the
ratio of money gained or lost (whether realized or unrealized) on
an investment relative to the amount of money invested. The amount
of money gained or lost may be referred to as interest,
profit/loss, gain/loss, or net income/loss. The money invested may
be referred to as the asset, capital, principal, or the cost basis
of the investment. ROI is usually expressed as a percentage.
There are two ways to measure the rate of return on an
investment.
1-Average annual rate of return (also known as average annual
arithmetic return)
2-Compound rate of return (also called average annual geometric
return)
Let's say you invest $100 in stock, which is called your
capital. One year later, your investment yields $110. What is the
rate of return of your investment? We calculate it by using the
following formula:
((Return - Capital) / Capital) × 100% = Rate of Return
Therefore,
(($110 - $100) / $100) × 100% = 10%
Your rate of return is 10%.