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Author: JAFO31 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 81642  
Subject: Re: How to calculate rate of return Date: 9/19/2008 12:21 AM
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pauleckler: "You can't accurately calculate annual return on an account on which you constantly add or withdraw funds. All you can do is estimate the rate of return."

Well you can, but mostly it is a PITA and requires using a spreadsheet.

"Most would take the $12K loss as 8/12 of a year. So the annual estimated loss is $17910 (12000/.67). Your estimated annual rate of return is -25.6%."

Assuming that you invest the $1500 at or near the first of the month, I SWAG your loss at more liske (23.68%); if you invest near the end of the month, then I SWAG your annual loss at more like (24.08%).

You can obtain an excel SS from our own Mad Capitalist at:

For a good explanation and a simple calculator that SWAGS the number, see:

and from that link: http://www.fool.com/investing/value/2006/10/18/how-to-evalua...

Good luck. Regards, JAFO
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