An investor invested 100,000 for ten months got 73.11% annualized returns. Added 300,000 making the total amt equal to 400,000 and this remained invested for five months with annualized returns of 24.16%. Added 600,000 making the total amt equal to 1,000,000 and this remained invested for five months with annualized returns of 19.49%. So how much did the investor get as returns on an avrg per annum?
Return on investment made in stages
- Thread starter Paragatre
- Start date
hello denis, pls note following clarifications of the case. Annualised returns mean pro rata per annum in this case. The amounts haven't been invested exactly for an yr, however the returns have to be indicated as 'per annum' in percentage. So 73.11% annualized returns on 100,000 for 10 months means the investor actually got 62,350 in return. now at this stage this return on investment (62,350) is paid out to the investor and does not form a part of invested sum for the next 5 month period. In short this is how it works: 100,000 invested for 10 months, 62350 paid out to the investor & 100,000 capital retained with the firm at the end of 10 month period. Investor invests another 300,000, so now the firm has 400,000 of the investor which the firm keeps for 5 months and returns of 39,200 is paid out to the investor at the end of these 5 months, again the capital of 400,000 is retained by the firm. Investor invests another 600,000, so now the firm has 1,000,000 of the investor which the firm keeps for a 5 month period. At the end of this period, the firm pays out 89,700 to the investor. At this point the investment case ends, firm also returns the total capital invested back to the investor (1,000,000). Now the firm wants to declare how much returns the investor got in percent per annum without the complications of an investment made in stages. Say for example..."Our firm gives 63% per annum to our investors!" 63%5 month perio and does n from the
Hello Denis,
Sorry for the tightly packed text, actually the "Enter" button didn't work whilst typing a reply on the forum. So went ahead without creating para's. Now typing the reply on a diff text file and pasting it on the forum. Hope it works.
You got the meaning and concept of my saying "pro rata" for "annualized" correctly, however your fig (60925) and mine (62350) differ coz you are taking the investment duration to be exactly 10 months (of course as stated by me!), however it actually is 10.23 months. I had rounded it off to 10 months (the way i represent it to the investor). My apologies!
Abt the incomplete message, i don't know what went wrong and where. However my message/reply was complete after the sentence....((Say for example..."Our firm gives 63% per annum to our investors!")). Rest stuff was extra and unintended.
Now coming to the point, Pls find attached herewith a word doc depicting the whole case if that makes it clearer.
Thx,
Parag.
Sorry for the tightly packed text, actually the "Enter" button didn't work whilst typing a reply on the forum. So went ahead without creating para's. Now typing the reply on a diff text file and pasting it on the forum. Hope it works.
You got the meaning and concept of my saying "pro rata" for "annualized" correctly, however your fig (60925) and mine (62350) differ coz you are taking the investment duration to be exactly 10 months (of course as stated by me!), however it actually is 10.23 months. I had rounded it off to 10 months (the way i represent it to the investor). My apologies!
Abt the incomplete message, i don't know what went wrong and where. However my message/reply was complete after the sentence....((Say for example..."Our firm gives 63% per annum to our investors!")). Rest stuff was extra and unintended.
Now coming to the point, Pls find attached herewith a word doc depicting the whole case if that makes it clearer.
Thx,
Parag.
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I tried to attach my excel file straightaway but the forum doesn't support excel files. Then I tried attaching .doc file that also had it s own probs. Finally .zip (which is an accepted format for the forum) was attached and you r saying that its not acceptable from me!! how do i send it?? Don't have acrobat.
Anyway Mr Denis if you can understand the abv messages from me then pls answer else tell me how i can get the excel or word file to you.
Anyway Mr Denis if you can understand the abv messages from me then pls answer else tell me how i can get the excel or word file to you.