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MayBee wrote:
Calculate percentage of fund growth in past yeras That depends on whether you want the total growth, the average rate, or the annual rate. Suppose you invested $10,000 5 years ago, and the investment is now worth $12,500. The total growth rate is 25%: (12500 - 10000) / 10000. That is the answer to your second question. (Note: This presumes that neither number is negative or zero.) The average rate is 5%, the total growth divided the number of periods: (12500 - 10000) / 10000 / 5. The annual rate is 4.56%: =RATE(5,0,-10000,12500). This is the "interest" rate at which $10,000 would grow to $12,500 when compounded each year (or whatever period). Be sure to format the cell as Percentage with 2 decimal places. Also, note the sign of the PV (-10000)and the FV (12500). Normally, what you pay is negative, and what you get (gross) is positive or negative, depending on whether it is a gain or loss, respectively. That is the simple case of a single payment of principal and a single payment of proceeds. You can also use the RATE function if you made payments of a fixed amount of principal in each period. You need to use the IRR function if you have varying cash flows. |
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