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Investing Strategies / It's Earnings That Count

URL:  https://boards.fool.com/jordan-start-with-year-zeros-earnings-of-203-26536349.aspx

Subject:  Re: What's in Your Portfolio? Date:  4/4/2008  11:47 PM
Author:  valuemoosie Number:  1499 of 1817

Jordan,

Start with year zero's earnings of 203. For each year:

[ 203 * (1 + .07)^n ] / (1 + .10)^n

where "n" is year 1,2,3,4,5.

The first part of the formula is the future value at 7% growth, and the second part discounts it back to the present at 10%.

It adds up to 935.

-joe
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