Select the value to solve, then enter the two requested inputs for one consistent period and cost basis.
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Return on Yield Formula
Here, return on yield means net realized gain or loss divided by principal for the chosen period. It is a simple return ratio, not APY, yield to maturity or an annualized rate. Enter net return after your chosen costs and exclude returned principal.
To solve for the other variables, the formula can be rearranged as:
- ROY = Return on Yield, expressed as a percentage
- NRR = Net Realized Return, in dollars
- P = Principal Amount, in dollars
Select the value to solve and enter the other two inputs. Principal must be positive. The principal inverse requires a nonzero rate and a positive implied principal; zero net return and zero rate do not determine a unique principal:
- Return on Yield: Enter net realized return and principal amount to find the percentage return.
- Net Realized Return: Enter principal amount and return on yield to find the dollar return.
- Principal Amount: Enter net realized return and return on yield to find the original principal amount.
Return on Yield Reference Values
The table below shows what different return on yield percentages mean for a $10,000 principal amount.
| Return on Yield | Principal Amount | Net Realized Return |
|---|---|---|
| 2% | $10,000 | $200 |
| 5% | $10,000 | $500 |
| 8% | $10,000 | $800 |
| 12% | $10,000 | $1,200 |
| 20% | $10,000 | $2,000 |
Example Calculations
Example 1: Calculate return on yield
You have a net realized return of $750 and a principal amount of $15,000.
The return on yield is 5%.
Example 2: Calculate net realized return
You have a principal amount of $25,000 and a return on yield of 6.5%.
The net realized return is $1,625.
FAQ
What does return on yield mean?
Return on yield shows the net return as a percentage of the principal amount. It helps you compare the size of a return relative to the amount invested or committed.
Is return on yield the same as net realized return?
No. Net realized return is the dollar amount gained after relevant costs or adjustments. Return on yield is the percentage version of that return compared with the principal amount.
Can return on yield be negative?
Yes. If the net realized return is negative, the return on yield will also be negative. For example, a $500 loss on a $10,000 principal amount gives a return on yield of -5%.
