Interest Rate Earned
Contents
Example #1
An account grew from $14,000 to $15,000 during the last quarter. Monthly deposits of $250 were made at the end of each month. What was the rate of return during this period?
Data Entry
Use the following values for the prompts:
Prompt |
Value |
|
Calculation Type |
Accumulation |
|
Calculate |
Interest Rate |
|
Current Account Value |
$14,000 |
|
Number of Years |
0.25 |
|
Deposit Amount |
$250 |
|
Type of Deposits |
Level Deposits |
|
Deposits per Year |
12 |
|
Deposits Made at |
End of Period |
|
Projected Value |
$15,000 |
Result
The Calculated Interest Rate shows 7.0774%.
Example #2
For 3 years your client has been making $250 monthly deposits. The account balance is now $10,500. What has been the client's average annual rate of return?
Data Entry
Use the following values for the prompts:
Prompt |
Value |
|
Calculation Type |
Accumulation |
|
Calculate |
Interest Rate |
|
Current Account Value |
$0 |
|
Type of Deposits |
Level Deposits |
|
# of Deposits/Year |
12 |
|
Amount of Each Deposit |
$250 |
|
Deposits Made at |
End of Period |
|
Interest Rate |
Do not enter value |
|
# of Years |
3 |
|
Projected Value |
$10,500 |
Result
The Calculated Interest Rate shows 10.2604%.