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11 Nov 09 17:13
Date Joined: 10 Oct 02
| Topic/replies: 329 | Blogger: irishlad's blog
i need help calculating a return on excel.

I use PMT function when the return is straight line but this isn't.


Invest 100
Period 1 get 10 of my capital back and 10 additional return
Period 2 get 5 capital back and 16 additional return
etc until no capital left.

Any ideas?
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Report irishlad November 11, 2009 6:10 PM GMT
used irr but don't know if that is right.
Report structuredbet November 11, 2009 7:34 PM GMT
IRR may be what you want. Depends what number you want to compare it against. IRR is the internal rate of return (i.e. omits interest rate /pv effect), thus cashflows of -100k +25k / +25k /+25k/+25k would give you a IRR of zero, whereas if that were a 'real' investment it would have an implied negative interest rate as you are laying out 100k UF and getting back 4x 25k UF. No capital loss but a loss of the risk free rate of interst
Report irishlad November 12, 2009 5:46 PM GMT
thanks structured bet.
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