| Title: | Market Investing |
| Moderator: | 2155::michaud |
| Created: | Thu Jan 23 1992 |
| Last Modified: | Thu Jun 05 1997 |
| Last Successful Update: | Fri Jun 06 1997 |
| Number of topics: | 1060 |
| Total number of notes: | 10477 |
Something tells me I should know how to do this, but I'm drawing a
blank. How do I calculate the periodic return, with a mid-term
contribution. e.g.
Begin of period Balance = 1000
Mid-term Contribution = 250
End of period Balance = 1500
What's the formula to calculate my periodic return?
| T.R | Title | User | Personal Name | Date | Lines |
|---|---|---|---|---|---|
| 359.1 | 22.22 % | BROKE::RAM | Wed Jan 20 1993 21:37 | 16 | |
Let A(i) = i'th investment
Let p(i) = period of the i'th investment
Let F = final value of investment
Then growth in investment G = F - (A(1) + A(2) + ... + A(n))
where n is the number of investments.
Then yield Y = G / ( (A(1) * p(1)) + (A(2) * p(2)) + .... + (A(n) * p(n)) )
In your case A(1) = 1000, p(1) = 1, A(2) = 250, p(2) = 0.5
So G = 1500 - 1250 = 250,
and Y = 250 /( 1000 * 1 + 250 * 0.5) = 250/1125 = 0.2222 or 22.22%
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