1. What is Monthly Return?

Monthly Return is the amount of money earned from an investment in a single month, calculated by multiplying the investment amount by the monthly interest rate.

2. How Does the Calculator Work?

The calculator uses the Monthly Return formula:

Where:

• \( \text{Investment} \) — Initial amount invested in dollars
• \( \text{Monthly Rate} \) — Monthly interest rate in decimal form (e.g., 0.01 for 1%)

Explanation: The formula calculates how much money your investment will generate each month based on the given rate.

3. Importance of Monthly Return Calculation

Details: Calculating monthly returns helps investors understand their cash flow, plan budgets, and compare different investment opportunities.

4. Using the Calculator

Tips: Enter investment amount in dollars and monthly rate in decimal form (e.g., 0.05 for 5%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is monthly rate different from annual rate?
A: Monthly rate is the rate applied each month, while annual rate is the yearly rate. To convert annual to monthly, divide by 12.

Q2: Does this calculator account for compound interest?
A: No, this calculates simple monthly return. For compound returns, you would need a different calculator.

Q3: What's a good monthly return rate?
A: This varies by investment type. Generally, 0.5%-2% monthly is considered good for conservative investments.

Q4: Can I use this for stock investments?
A: Yes, but remember stock returns can be volatile and may not be consistent month-to-month.

Q5: How do I convert percentage to decimal?
A: Divide the percentage by 100 (e.g., 5% becomes 0.05).