Localfund.com - All about Fund and Investment
*Home>>>Return Investment

**Help*!!* How Do I Compute my Annual Return on Investment?-This is for a seven year period??Help!!*?

started with $4,000 seven years ago

I now have $1,019,682


How do I figure out my annual return on investment?

thanks!

The annual return can not really be calculated by dividing the total returns by number of years.

The correct method is here:

Your Initial Investment : 4000
Current Value of Investment: 1019682

So Holding Period Return (HPR) is

1019682/4000 = 254.9205
So the rate of return = (254.9205-1)=253.9205*100= 25392.05%

The HPR is not the proper method to calculate the return. The correct method is to calculate CAGR i.e. Compounded Annualised Growth Rate.

Annual HPR = (HPR)^1/n
Where n= number of years

= (253.9205)^1/7=2.205607613
So the CAGR= 2.205607613-1
=1.205607613*100
=120.5607%

You can test this result by calculating future value (FV) bu putting following values as we have found above:

Present Value=4000
FV =?
N=7
Rate of Interest = 120.5607

The result would be your current value in approx. Will not be exact due to fractions.

Tags
　　Startup Capital 　　Sector Fund 　　Seed Money 　　Seed Capital 　　Return Investment 　　Real Money 　　Real Estate Investment 　　Raise Capital
Related information
  • Percentage of return on investment in subletting a mobile home?

    Lonnie Scruggs has a great book on the subject called Deals on Wheels. It costs about 30 bucks and talks about mobile home investing. The book can be found at creonline.com . This is another great...

  • The return on an investment should cover at least (Ke)....?

    Calculate out the NPVs of both decisions, shutting down immediately. You have to include the capital gains tax (if any) for the salvage value. Then, calculate another one with the project going f...

  • Anybody knows any NO RISK INVESTMENT/ fixed-income investment/ fixed-return investment?

    well risk is involved in everything but i think mutual funds is an option or real estate

    ...
  • In rate on return investment ratio, why is the interest multiplied by (1-tax rate)?

    because you will be paying taxes on your interest earnings (as well as capital gains, btw) when you file your taxes

    ...
  • Hight return investment?

    If you consider 49%p.a. high enough, then you may want to consider a particular investment system. One of the best systems I have found that has generated such returns is the Stocks Monthly syst...

  • What is a reasonable investment return average?

    To my mind 7.62% is too low.... I am getting 2% interest every month (APY 24%).

    ...
  • I need a simple formula to figure the return on investment for some stores that were purchased?

    There are many ways to figure the ROI but visit the web site at the following url ...

  • Mathematicians, how do you properly calculate the percentage of return on my investment?

    It's a simple formula actually. % return = (final price - initial price) / initial price * 100% In your case, (238-182)/182 *100% = 30.8% Keep printing that money!

    ...
    • 　

    Categories--Copyright/IP Policy--Contact Webmaster