Enter the current return ($), the expected risk free return ($), and the invested amount ($) into the Return on Premium Calculator. The calculator will evaluate and display the Return on Premium.

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## Return on Premium Formula

The following formula is used to calculate the Return on Premium.

**ROP = (CR – ERFR) / P *100**

- Where ROP is the Return on Premium (%)
- CR is the current return ($)
- ERFR is the expected risk free return ($)
- P is the invested amount ($)

## How to Calculate Return on Premium?

The following example problems outline how to calculate Return on Premium.

**Example Problem #1**

- First, determine the current return ($).
- The current return ($) is calculated to be : 4,000.

- Next, determine the expected risk free return ($).
- The expected risk free return ($) is measured to be: 1,000.

- Next, determine the invested amount ($).
- The invested amount ($) is found to be: 20,000.

- Finally, calculate the Return on Premium using the formula above:

ROP = (CR – ERFR) / P *100

The values given above are inserted into the equation below and the solution is calculated:

ROP = (4,000 – 1,000) / 20,000 *100 = 15 (%)

**Example Problem #2**

The variables needed for this problem are provided below:

current return ($) = 555

expected risk free return ($) = 140

invested amount ($) = 1500

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.

ROP = (CR – ERFR) / P *100 =** **(%)