OT: Rate of Return Calculations, Big brain Fart |
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OT: Rate of Return Calculations, Big brain Fart |
Qarl |
May 12 2005, 06:52 PM
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#1
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Shriveled member Group: Benefactors Posts: 5,233 Joined: 8-February 03 From: Florida Member No.: 271 Region Association: None |
Let's say I invested $1000 in a mutual fund on November 1, 2002
At the end of April of 2005, it is worth $1450. My gain is $450 or 45% since I purchased it. But how do I calculate how much average annual return it has been for the 30 month period. Or in other words, it's equivalent to an investment making X% a year? What's the formula? Thanks.... |
scotty914 |
May 12 2005, 07:49 PM
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suby torque rules Group: Members Posts: 1,525 Joined: 20-July 03 From: maryland, the land of 25 year Member No.: 924 |
you just figured what the 3 year rate would be not the 30 months 1000 * 1.18 = 1180 12 months 1180 * 1.18 = 1392.4 24 months 1392 * 1.09 = 1517 30 months so the annual rate is just under 18 % now you need to remember that the interest is figured on a monthy basis so it is probably closer to 16 % figured on a monthly rate of around 1.33 %. remember that you gain the interest on a monthly rate so you really cant figure it yearly except to be lazy |
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