Can some king person help me learn where to find the correct formula I can use to determine the interest rate of my return?
I'm not looking for someone to give me the answer (I'm happy to do the math myself). Rather, I just don't know what the correct formula is to use and was hoping someone here knows.
Starting amount: $10,000
Interest rate is: X
Time: 6 months
Total Earnings Over Time: $1,879 (6 months)
Ending Total Amount: $10,000.00 + $1,879.00 = $11,879.00
The time consideration is what's confusing to me. If I'm earning about $10.30 per day, do I use a formula where interest is compounded daily or monthly, or does it matter since I know the earnings over time value?
homework help is on /r/eddit
This is /biz/ as in /biz/ness; not "help me with my homework, I'd rather spend the next 3 years not working and gathering student loans so I can come out at 30 with 100k in student loans and no workable experience".
Holding period return (HPR) is (end price - begin price + net other CFs received) / begin price
To annualize it, add 1 and compound by the inverse fraction of a year held (365/n) where n is days held, or (12/m) where m is months held
For IRR just use a financial calculator or Excel IRR() function, otherwise shit's a mess, literally guess and check
J = 11879
C = 10000
n = 6
i = ?
J = C . (1+i)^n
(J/C) = (1+i)^n
(J/C)^(1/n) = 1 + i
(J/C)^(1/n) - 1 = i
(11879/10000)^(1/6) - 1 = i
i = 0,02911 or 2,91 % monthly
> fuck off newfriend
This is a legitimate question about a policy I own and the statements don't give a clear rate of return; only a daily value of cash value increase.
As I said, I'm not asking anyone to do the math for me, I'm simply trying to determine the correct formula to use as I'm a personal investor and not clear on how to factor in the time.