Get Professional Statistics Assignment Help in Compound Return from Tutorchrome statistics assignment experts. offering 24x7 Assignment Writing Help to university students across the USA, Canada, UK, Australia and UAE countries.
Compound Return
Compound Return can be defined as the rate of return that is usually expressed as a percentage that represents the cumulative effect. It is usually expressed as the series of gains as well as losses that have an original amount of capital over a period of time.
Compound returns are usually articulated in annual terms which means that the percentage number that is reported represents the annualized rate at which capital has compounded over time. If the compound return is expressed in annual terms, then it is known as the "compound annual growth rate" that is known as the CAGR.
Computing compound return is essentially the same thing as computing the effect of compound interest, but the process is reversing it rather than figuring out how much money an investment will be worth knowing the compound interest rate and the number of periods. For computing compound return, it is generating what the interest was based on the final as well as the initial values of an investment.
For example, if an investment fund claims to have produced a 10% annual compound return over the past five years. This means that by completing the fifth year the fund's capital has grown to a size equal to what it would be if the funds on hand at the beginning of each year. So it had earned exactly 10% by the end of each year.
Compound Return Assignment Help
In other words, suppose it is started with an initial amount of $1,000 and if it has to multiply 1,000 by 1.1 five times, then it will end up with about $1,611. If an amount of $1,000 ended up being worth $1,611 by the end of five years, then the investment has generated a 10% annual compound return over that five-year period.
This does not mean that the investment actually appreciated by 10% during each of the five years and any pattern of growth that led to a final value of $1,611 after five years it would be 10% of the annualized return.
Suppose the investment earned anything for the first four years and then earned $611 in its last year and this would still equate to a 10% annual compound return over the five-year measurement period. The final amount is still equal to what the $1,000 would have grown to if it had appreciated by a steady 10% each year.
