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Author: Radish Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 3687  
Subject: Re: Quicken's Rate of Return incorrect Date: 4/23/1998 1:12 AM
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eldeon,

I agree that in real life if you had money in a savings account that compounded interest annually, you'd want to close the account and open a new one frequently so as to effectively compound the interest. That's why banks don't have savings accounts with annually compounded interest!

That doesn't change the fact that Quicken's answer is incorrect.

I do have examples where Quicken's answer is incorrect but the data is more in line with a real-world investment, but they are very complicated and involve multiple investments over non-periodic intervals. The nice thing about the example I gave is that it is so simple and shows the error so clearly.
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