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Reinvestment Rate Calculator

Formula

The formula to calculate the Reinvestment Rate is:

$RIR = \left( \frac{RA}{IA} \right) \times 100$

Where:

$RIR$ is the Reinvestment Rate (%)
$RA$ is the reinvestment amount ($)
$IA$ is the initial investment amount ($)

What is Reinvestment Rate?

The reinvestment rate is a measure of the percentage of earnings or returns that are reinvested back into the investment, rather than being withdrawn. It is a key metric for understanding the growth potential of an investment, as reinvested earnings can generate additional returns over time.

Example Calculation 1

Let's assume the following values:

Reinvestment Amount (RA) = $5,000
Initial Investment Amount (IA) = $25,000

Using the formula:

$RIR = \left( \frac{5000}{25000} \right) \times 100 = 20\%$

The Reinvestment Rate is 20%.

Example Calculation 2

Let's assume the following values:

Reinvestment Amount (RA) = $10,000
Initial Investment Amount (IA) = $50,000

Using the formula:

$RIR = \left( \frac{10000}{50000} \right) \times 100 = 20\%$

The Reinvestment Rate is 20%.