Results 1 to 2 of 2

Math Help - Can anyone help me with this question as fast as you possible please!!!!!

  1. #1
    Newbie
    Joined
    Jul 2005
    Posts
    5

    Can anyone help me with this question as fast as you possible please!!!!!

    One of the often made assumptions is that an investment that averages x% over the term of an investment and and investment with a fixed return of x% over the term of the investment are equivalent.
    Investigate the assumption to see if it is warranted. Justify and make suggestions re investments.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Site Founder Math Help's Avatar
    Joined
    Apr 2005
    Posts
    171
    Quote Originally Posted by Caro
    One of the often made assumptions is that an investment that averages x% over the term of an investment and and investment with a fixed return of x% over the term of the investment are equivalent.
    Investigate the assumption to see if it is warranted. Justify and make suggestions re investments.
    The key here is understanding the exponential growth involved in investments. You see you are earning x% on your initial investment but you are also earning x% on the x% that you earn. Here is an example:

    2 year investment of $1000, return 10%

    First year $1100
    Second year $1210 (notice you earned $110 this year)

    2 year investment of $1000, 8% then 12% (average 10%)

    First year $1080
    Second year $1209.60
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. need help fast!!!
    Posted in the Math Topics Forum
    Replies: 3
    Last Post: January 22nd 2009, 12:08 AM
  2. Fast SHM question
    Posted in the Algebra Forum
    Replies: 4
    Last Post: August 4th 2008, 05:24 AM
  3. i need help fast....x
    Posted in the Trigonometry Forum
    Replies: 1
    Last Post: June 2nd 2008, 05:09 PM
  4. Fast Question
    Posted in the Math Topics Forum
    Replies: 1
    Last Post: September 2nd 2007, 05:10 PM
  5. Need help fast
    Posted in the Statistics Forum
    Replies: 1
    Last Post: July 20th 2007, 06:30 PM

Search Tags


/mathhelpforum @mathhelpforum