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Rate of Return Earned
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Rate of Return Earned
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Rate of Return Earned
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Rate of Return Earned
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Rate of Return Earned
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An account grew from $14,000 to $15,000 during the last quarter. Monthly deposits of $250 were made at the end of each month. What was the rate of return during this period?
Use the following values for the prompts:
Prompt |
Value |
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Type of Fund |
Future Value |
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Current Account Value |
14000 |
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Type of Deposits |
Level Deposits |
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# of Deposits/Year |
12 |
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Amount of Each Deposit |
250 |
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Deposits Made at |
End of Period |
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Interest Rate |
Do not enter value |
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# of Years |
0.25 |
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Future Value |
15000 |
Place the cursor on the Interest Rate prompt and click on the 'Calculate Cursor Line' button.
The account had a rate of return of 7.2048%.
For 3 years your client has been making $250 monthly deposits. The account balance is now $10,500. What has been the client's average annual rate of return?
Use the following values for the prompts:
Prompt |
Value |
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Type of Fund |
Future Value |
|
Current Account Value |
0 |
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Type of Deposits |
Level Deposits |
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# of Deposits/Year |
12 |
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Amount of Each Deposit |
250 |
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Deposits Made at |
End of Period |
|
Interest Rate |
Do not enter value |
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# of Years |
3 |
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Future Value |
10500 |
Place the cursor on the Interest Rate prompt and click on the 'Calculate Cursor Line' button.
The average annual rate of return has been 10.8471%.