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quick question re ROI or ROR

kuba

TRIBE Member
finance people:
if you buy a house something for $5000, and sell it for $15000 4 years later, is your yearly rate of return 75%, on average?

Or- perhaps you know the formula fo this equation?

ALSO-

what is the formula to figure out:

if you have 5000 to invest, and plug in a x% expected rate of return, and y as your years, what is the formula to figure out what you'll make?
 

SJN

TRIBE Member
Originally posted by kuba
finance people:
if you buy a house something for $5000, and sell it for $15000 4 years later, is your yearly rate of return 75%, on average?
no, your return is 31.61% per annum

5000 x (1 + 31.61%)^4 = 15000
 
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kuba

TRIBE Member
Re: Re: quick question re ROI or ROR

Originally posted by SJN
no, your return is 31.61% per annum

5000 x (1 + 31.61%)^4 = 15000
boom, thank you.

p.s. mortgages have nothing to do with rate of return and it slipped my mind.
 

technowelt

TRIBE Member
Compounded interest formula:
FV = (P+[r/n])^n

FV = Future Value
P = Principal
r = interest rate (%)
n = number of periods

edit: beat me
 

SJN

TRIBE Member
Originally posted by technowelt
Compounded interest formula:
FV = (P+[r/n])^n

FV = Future Value
P = Principal
r = interest rate (%)
n = number of periods

edit: beat me
that formula is wrong

it shoud be:

FV = P x [(1+r)^n], where r is the rate of return per period
 
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zoo

TRIBE Member
Re: Re: Re: Re: quick question re ROI or ROR

Originally posted by SJN
p.p.s..... yes they do
Originally posted by defazman
math is math, my friend


while i don't necessarily "like" it, it probably serves the financial institutions better if they can convince their employees that there is a difference between the math that various departments do

something about job differentiation, pride, confidence, and all that jazz
 

kuba

TRIBE Member
Re: Re: Re: Re: quick question re ROI or ROR

Originally posted by defazman
math is math, my friend
ok ok they do! *gulty look*.. but,,, err, I had a bad weekend ... y ou know... so i umm,,,, forgot.

BUSTED (me)
 
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