Enter the current return ($), the expected risk free return ($), and the invested amount ($) into the Return on Premium Calculator. The calculator will evaluate and display the Return on Premium. ## Return on Premium Formula The following formula is used to calculate the Return on Premium. ROP = (CR – ERFR) / P *100 • Where ROP is the Return on Premium (%) • CR is the current return ($)
• 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

1. First, determine the current return ($). • The current return ($) is calculated to be : 4,000.
2. Next, determine the expected risk free return ($). • The expected risk free return ($) is measured to be: 1,000.
3. Next, determine the invested amount ($). • The invested amount ($) is found to be: 20,000.
4. 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 = (%)