Can a mutual fund's past rate of return be considered as interest rate?

Hello, I am given these past performance of a mutual fund:
2003 | 2004 | 2005 | 2006
8.42% | 7.89% | 11.05% | 11.96%

Does this mean that if I am to project the future value of my investment, I can safely assume that the compounding interest may be around 9.83% per annum? (9.83% is the average of the above figures)

So using the compounding interest formula: If I invest $10,000 in mutual funds at a compounding interest rate of 9.83% I can probably have around $26,617.81 after 10 years.

Is this a proper way of computing future value given the past rate of returns of the fund?

Fund return is a combination of reinvested dividends, capital gains and changes in asset value. Your math is correct IF you assume that future performance will match prior performance. There is no guarantee on that.

Past performance is a rate of return, which includes dividends gains, and other income earned by the fund. Past performance is not a guarantee of future returns. You can make a projection based on past performance, but it may turn out to be quite different. As you can see, in the four years you have there is considerable fluctuation.

Your computations are OK, but don't be surprised if the projection does not pan out. Who knows? It may turn out to be even better.

The stock market has historically returned about 10 percent a year over the long term, but short term fluctuations can be wild.