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Author: yFool One star, 50 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 10:28 AM
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Sorry…
as I said in the initial post, I'm not great with the financial terms, just taking a crack at the numbers. Do "banks" really do this? Does there exist a bank that will, figuratively speaking, pay out 100% gain (or half of the annual yield) after 6 months when the annual yield is 200%? This doesn't make much sense to me. As mentioned in a post above, one could then reopen an account, invest the $2,000 total, and again close at 6 months, boosting your yield to 300%. If I were running the bank I would not give a 100% gain for 6 months. As mentioned in the latter half of my reply, I would return $1732 or SquareRoot(1+annual gain) rather than $2,000. That way if some Fool like me tried to open another account, I couldn't take advantage of me. Is there a real life situation where your example applies or is someone just giving a simplified periodic statement? <salivates at opportunity to chew on another example>

Y
(quicken apologist)
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