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#1
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which financial function should I use?
I'm not sure which financial function to use. I'm trying to determine the
rate of return of a known investment, with a known time period and known ending value. What do I use to solve for the rate of return over the life of this investment? |
#2
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which financial function should I use?
IRR:
http://www.tutorialized.com/view/tut...in-Excel/23330 http://www.techonthenet.com/excel/formulas/irr.php IPMT: http://www.bettersolutions.com/excel...P446920522.htm http://www.techonthenet.com/excel/formulas/ipmt.php Rate: http://www.ehow.com/how_2103566_calc...ing-excel.html http://www.techonthenet.com/excel/formulas/rate.php Regards, Ryan--- -- RyGuy "Ken W" wrote: I'm not sure which financial function to use. I'm trying to determine the rate of return of a known investment, with a known time period and known ending value. What do I use to solve for the rate of return over the life of this investment? |
#3
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which financial function should I use?
If you have a starting value (PV) and an ending value (FV), then you want
the Rate function. If, as is more normal in the real world, you have a series of cash flows and and ending value, you want XIRR. Regards, Fred. "Ken W" wrote in message ... I'm not sure which financial function to use. I'm trying to determine the rate of return of a known investment, with a known time period and known ending value. What do I use to solve for the rate of return over the life of this investment? |
#4
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which financial function should I use?
I only have an investment and future value and number of periods - no annual
payments are made (it's an equity investment in a company). It returns "#NUM". I changed the guess around alot, but it hasn't helped. "Fred Smith" wrote: If you have a starting value (PV) and an ending value (FV), then you want the Rate function. If, as is more normal in the real world, you have a series of cash flows and and ending value, you want XIRR. Regards, Fred. "Ken W" wrote in message ... I'm not sure which financial function to use. I'm trying to determine the rate of return of a known investment, with a known time period and known ending value. What do I use to solve for the rate of return over the life of this investment? |
#5
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which financial function should I use?
What returned #NUM??????? Excel we're good at, mindreading isn't our
specialty. We can't help you until you show us the formula you used. Regards, Fred/ "Ken W" wrote in message ... I only have an investment and future value and number of periods - no annual payments are made (it's an equity investment in a company). It returns "#NUM". I changed the guess around alot, but it hasn't helped. "Fred Smith" wrote: If you have a starting value (PV) and an ending value (FV), then you want the Rate function. If, as is more normal in the real world, you have a series of cash flows and and ending value, you want XIRR. Regards, Fred. "Ken W" wrote in message ... I'm not sure which financial function to use. I'm trying to determine the rate of return of a known investment, with a known time period and known ending value. What do I use to solve for the rate of return over the life of this investment? |
#6
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which financial function should I use?
On Nov 22, 5:34*am, Ken W wrote:
I only have an investment and future value and number of periods - no annual payments are made [...]. It returns "#NUM". I changed the guess around alot, but it hasn't helped. If you have only the two data points, you should use RATE. Remember to enter the initial investment and future value with opposite signs. For example, =RATE(5,0,-1000,2000). If the #NUM error persists, yes, it could be because you need to provide a guess. Unfortunately, it is often difficult to choose a good guess. Also remember that RATE returns a result in terms of the number of periods. In my example above, if 5 is years, RATE is an annual rate; but if 5 is months, RATE is a monthly rate. You can convert a monthly rate to an annual rate in two ways: =12*RATE(5,0,-1000,2000) =(1 + RATE(5,0,-1000,2000))^12 - 1 It is debatable which formula to use; it depends on your intent. The latter compounds the rate. |
#7
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which financial function should I use?
Thanks - didn't have PV negative!
"joeu2004" wrote: On Nov 22, 5:34 am, Ken W wrote: I only have an investment and future value and number of periods - no annual payments are made [...]. It returns "#NUM". I changed the guess around alot, but it hasn't helped. If you have only the two data points, you should use RATE. Remember to enter the initial investment and future value with opposite signs. For example, =RATE(5,0,-1000,2000). If the #NUM error persists, yes, it could be because you need to provide a guess. Unfortunately, it is often difficult to choose a good guess. Also remember that RATE returns a result in terms of the number of periods. In my example above, if 5 is years, RATE is an annual rate; but if 5 is months, RATE is a monthly rate. You can convert a monthly rate to an annual rate in two ways: =12*RATE(5,0,-1000,2000) =(1 + RATE(5,0,-1000,2000))^12 - 1 It is debatable which formula to use; it depends on your intent. The latter compounds the rate. |
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