Average Annual Return
Top bond fund. An investment of $10,000 in the Emerging Country Debt Fund in 2001 was worth $24,780 in 2006. Use the formula :
r = (s/p)^1/n - 1 to find the 5-year average annual return.
p = 10,000
s = 24,780
n - 1 = 2006 - 2001 = 5 and so, n = 5...Does n = 5?????
I think the formula tells me thar (s/p) is raised to the (1/n-1) power.
The formula looks suspect to me. Are you sure it's not:
Originally Posted by magentarita
Look here:Bond Formulas
And is r the annual interest rate of return?
Yes, the formula is as you said.
Originally Posted by masters