quick question re ROI or ROR

[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?

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?

 

[kuba]

bump.

surely someone here is smarter than me in basic finance.

 

[defazman]

don't you sell mortgages or something?

 

[vinder]

lol

 

[SJN]

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

 

[kuba]

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.

 

[SJN]

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

Originally posted by kuba
p.s. mortgages have nothing to do with rate of return

p.p.s..... yes they do

 

[technowelt]

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

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

edit: beat me

 

[defazman]

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

Originally posted by kuba
mortgages have nothing to do with rate of return and it slipped my mind.

math is math, my friend

 

[SJN]

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

 

[zoo]

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

 

[LeoGirl]

what the fuck is ^

 

[Gizmo]

to the power of

e.g 2 ^ 3 = 2 x 2 x 2 = 8

 

[kuba]

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)