Question

In: Finance

You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows: Beg Year...

  1. You started your investment with an opening deposit of $1,000.  Your portfolio grew as follows:

Beg Year 1

Beg Year 2

Beg Year 3

Beg Year 4

Beg Year 5

EndYear 5

$1,000

$1,074

$1,201

$1,109

$1,175

$1,214

  1. What was your average return?  (Arithmetic average)
  2. What was your actual return? (Geometric average)
  3. Use the TVOM to calculate the Rate (R) using the End year 5 as your Future Value.  

PLEASE SHOW HOW THIS IS DONE IN EXCEL

Solutions

Expert Solution

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -


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