Comments on: Estimate Your Personal Rate of Return for Multiple Years http://thefinancebuff.com/2007/01/estimate-your-personal-rate-of-return.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: TFB http://thefinancebuff.com/2007/01/estimate-your-personal-rate-of-return.html/comment-page-1#comment-35 TFB Sun, 07 Jan 2007 16:23:00 +0000 http://blog.thefinancebuff.com/?p=54#comment-35 Calculate cumulative return using your "profit" number divided by beginning balance plus <b>one half</b> of your net investments. <br/><br/>17400 / (20000 + 12600/2) = 0.662<br/><br/>The reason for one half is because your net new investments are put into the pool over time, not all at once at the beginning. Calculate cumulative return using your "profit" number divided by beginning balance plus one half of your net investments.

17400 / (20000 + 12600/2) = 0.662

The reason for one half is because your net new investments are put into the pool over time, not all at once at the beginning.

]]> By: Anonymous http://thefinancebuff.com/2007/01/estimate-your-personal-rate-of-return.html/comment-page-1#comment-34 Anonymous Sun, 07 Jan 2007 10:57:00 +0000 http://blog.thefinancebuff.com/?p=54#comment-34 using your example, here's what i thought.<br/><br/>profit is: 50,000 - (20,000 + 12,600) = 17400<br/><br/>therefore, cumulative return is:<br/><br/>17400 / (20,000 + 12,600) = 0.53<br/><br/>what's wrong with this caluation?<br/><br/>Thanks. Great work. using your example, here's what i thought.

profit is: 50,000 – (20,000 + 12,600) = 17400

therefore, cumulative return is:

17400 / (20,000 + 12,600) = 0.53

what's wrong with this caluation?

Thanks. Great work.

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