Enter the total investment value and the annual yield into the calculator to determine the annual income from the investment.
Income Investing Formula
The following formula is used to calculate the total income from an investment:
I = TI * AY
- Where I is the investment income ($) yearly
- TI is the total investment amount ($)
- AY the annual yield ($)
Income Investing Definition
Income investing, or investment income, is a term used to describe the total income earned from a particular investment, usually on an annual basis.
The investment income is determined by the total investment amount and the yield of the investment.
The yield is the return of the investment, typically shown as a percentage of the total investment. For example, a yield of 5% of a 1000 dollar investment would return $50 annual in investment income.
How to calculate investment income?
- First, determine the total amount invested.
For this example problem, the total amount invested is $5000.00.
- Next, determine the yield of the investment.
This money was invested in an index fund that returns 10% annually.
- Finally, calculate the income from investing.
Using the formula above the income from investing is found to be:
I = TI * AY
I = $5000 * (10/100)
I = $500.00 income annually.