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If an investment returns 15% in 5 years, what is the annual rate of return? |
If an investment returns 15% in 5 years, what is the annual rate of return? If it states 15% in 5 years this is a fixed term investment meaning that if you withdraw your funds from this investment before that period you likely to get nothing. If this is some sort of trick question on interest then there is no way I could tell you as the interest would be cumulative i.e you get interest on interest already paid and the yearly rates may change over the course of the investment. For tax purposes the income from an investment would probably not have to be declared year on year until it matures anyway as you could not access it. SEEK SPECIALIST ADVICE Depends on the frequency of the compounding period (monthly, quarterly, annually...), and also on other assumptions. I would be more concerned about the return of the principal sum, and its safety. I could have given u close answer, but I am not at work. It should be close to 2.85% annual return assuming frequency every three months. Crappy. Your annual rate of return would be 2.83%. |
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