Calculator for average annual total return

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Jan 23, 2008 2:55 pm

Does anyone know of a website that can help me with the following calculation?  


 
A client has given me a total of $407,000 not in a lump sum but on different dates.
 
$100,000 in 5/2005
$102,000 in 12/2005
$205,000 in 12/2006
 
His account value now is $430,000.
 
He said his average annual return is 3.5% which seemed low to me.
 
Can I calculate this on the internet somewhere or do I have to purchase a business calculator?
 
Thanks in advance for any valuable feedback.
Jan 23, 2008 3:23 pm

Excel can handle that.

Jan 23, 2008 4:21 pm

If your firm doesn't provide detail performance reporting, you are behind the curve.  If a client came in with that kind of statement, within 10 seconds I could either prove or disprove it and tell him what worked and what didn't for any period of time he's had money with me.  Your bank should invest in something similar...it will pay for itself many times over.

Jan 23, 2008 4:24 pm

Don't forget to factor loads and commissions.

Jan 23, 2008 4:48 pm

My first provides last 12 months, year to date, total return since inception and quarterly.   However, they do not readily provide annual average total return.   

 
How can i do this on Excel?
 
scrim
Jan 23, 2008 7:51 pm

I dont have my HP calc with me..but on the site below...I came up with 3.12%.

I used your montly dates....assuming client deposited the money on the 1st of the month.
 
http://www.showmethereturn.com/calculator.html
 
 
 
Jan 23, 2008 8:07 pm
scrim67:

My first provides last 12 months, year to date, total return since inception and quarterly.   However, they do not readily provide annual average total return.   

 
How can i do this on Excel?
 
scrim
 
I'm not a math major, but wouldn't (since inception/total # of days X 365) invested get you close?
Jan 23, 2008 8:13 pm

I'd also observe that the recent slide notwithstanding, it appears that your bank's manager selection and strategy is lacking.  I wouldn't be very happy with that kind of performance either.

Jan 24, 2008 12:07 pm

Thanks for the link...it appears it's exactly what I'm looking for!!!!!

 
fyi,   this particular client has about 470,000 in October before the recent downturn.   His average annual return was showing about 10% as of the end of October.
 
Since the downturn his account is down to about $430,000 which is about 9%.
 
Changes his annual average return to 3.26%.
 
Sad, but true.
 
He's about half in stocks and half in bonds
 
scrim
Jan 24, 2008 6:14 pm

I like the calculator, but the only downside is that there's a very limited number of cashflows you can enter