Replies to post #36173 on A.I.M. Users Bulletin Board (AIMUSERS)

[Conrad]

>>C1 = 20000/2*(1+0,07)*2 = 2140. . .that is fair if the Average invested capital = 20000 <<


This obviously is a typing error should be:

C1 = 20000*(1+0,07*2) = 21400. . .that is fair if the Average invested capital = 20000

I had corrected it earlier but did not Update the text:-(

In the above it is obvious also that if one uses an average ficticious investment for a period for comparing the yield and then assumes the yield arises from a compounding growth process the Yield Percentage becomes lower!

[Toofuzzy]

Hi Conrad

What I do for myself is year by year.

If my account is higher at the end of the year:

(Ending balance - (starting balance + amount added during year) ) / starting balance = return %

Figuring out an average return over multiple years while adding money is beyond me though I know one of your formula does that.

Toofuzzy