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How to calculate Money multiplier

The Money multiplier formula, with plain worked examples you can check yourself.

Money multiplier = 100 ÷ RR

The result is a number in ×.

Worked examples

RR = 20%Money multiplier = 5×
RR = 25%Money multiplier = 4×
RR = 25%Money multiplier = 4×

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Multiply by 100 to show the answer as a percentage.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Investing & Returns.

Related terms

DividendBondHedgingArbitrageLeverageAsset allocation

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