All Questions
Tagged with compound-interest financial-literacy
14
questions
1
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2
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89
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For mutual funds, does average annual return mean compounded annually or continually or daily?
Vanguard's Portfolio Allocations page (1926-2019) shows 9.21% Average annual return for 70% Equity and 30% Fixed income.
Does this mean 9.21% compounded annually?
GOAL...
If at age full retirement age ...
- 676
0
votes
1
answer
149
views
How to calculate Average CAGRs?
I have sales by 30 different products over years (2015-2022). I need to compute Compound Annual Growth Rate, however some of the product groups have high CAGR and some of them have quite low CAGR. So ...
- 101
1
vote
1
answer
350
views
How does the continuously compounded interest formula work in terms of months?
The continuously compounded interest formula is:
Pe^rt
Where:
P = Principle
e = 2.718...
r = Annual interest rate
t = time in years
If instead of an annual interest rate, I got a monthly interest ...
- 47
2
votes
1
answer
139
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Am I using the right method for this compound / simple interest problem with annual deposits?
I am trying to solve the following exercise:
A bank account is opened at the beginning of the year 2013 by making a one-off deposit of £1000. A further deposit of £200 is made at the beginning of each ...
- 21
1
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2
answers
128
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How has the modern era of low dividend paying index affect the principles of compound interest?
From my understanding:
*To keep it simple, we will keep the asset as index S&P500, not including asset allocation.
Compound interest (or compounding interest) is interest calculated on the ...
- 11
3
votes
4
answers
285
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What is an appropriate metric measure average annualized rate of return for an average investor?
Let us say an investor invests $X per year for N years. Let us say the final portfolio value is $Y. In this scenario, how should I measure a metric that quantifies "average annualized return"?
I ...
- 51
0
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2
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325
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How to calculate the payback period when income is reinvested? [closed]
Could someone please show me how to calculate the payback period with compounded interest? So if I had a initial investment of $100, paying 1.5% interest annually that is reinvested, how do I ...
- 21
3
votes
1
answer
1k
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Which compound interest formula can I use to find the final balance with monthly contributions that increase yearly?
I apologise in advance if this has been asked already - I can't seem to find a similar question. I am looking for a formula to find the final balance when provided the following variables:
Initial ...
- 33
2
votes
1
answer
224
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Investing and compound interest? [duplicate]
I see lot of information about the power of compound interest and how it can help money grow. I understand the mathematics of compound interest but I have no idea how to take some money and make it ...
- 147
4
votes
1
answer
2k
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Compound Interest Formula With Monthly Investment Increase
I'm looking to solve this problem:
If I were to start investing now, With a 4% annual return compounded monthly what is the function for my return if my monthly input is initially $2000 then for ...
1
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1
answer
571
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How do I know if my mutual fund is compounded?
I have money in a S&P Index Fund (VFIAX specifically). How do I know if my index fund is compounded? Furthermore, at what intervals is it compounded?
And more importantly, should it be compounded?...
- 3,817
4
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1
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1k
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What are the ways compounding can occur from an investment in stocks and bonds?
I've been trying to understand the multiple ways stocks and bonds compound (under the definition of compounding as generating earnings from the reinvestment of previous earnings, my understanding of ...
- 663
3
votes
2
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1k
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Compounded Interest on Mutual Funds
I may be missing or misunderstanding something regarding how compound interest works with mutual funds and ETFs.
Let's say I have $10,000, and I invest said monies in mutual fund XXXXX at $100/share, ...
- 155
3
votes
2
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44k
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converting annual interest rate to monthly when compounding frequency known
Just like the title I'm looking for the formula to convert APR to monthly when I also know compounding frequency
eg APR is 8% and being compounded daily what is the monthly interest rate I earn.
Or ...
- 184