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 October 15th, 2017, 10:59 AM #1 Newbie   Joined: Oct 2017 From: Rhode Island Posts: 1 Thanks: 0 Equation Help Hello trying to do a calculation to anualaize growth for an incentive plan i have a fixed value (meaning the relationship was owned for 12 months by one person) and a variable for the fixed value for example i used this an illustration i took ownership for a portfolio that was worth 65,000 on Jan 1 at the end of the year it was worth 71,000 i used this calculation 71,000*(12/12)-65,000*(12/12)/(65,000*(12/12))= 9.23% growth i inherited some new clients mid year worth 25,000 and at the end of the 6 months they were worth 21,000. so i tried this calculation 21,000*(6/12)-25,000*(6/12)/(25,000*(6/12)) which for this i got (16%) which i am not sure is right also if it is how would i then blend the scores to get their true growth ty October 15th, 2017, 12:11 PM   #2
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Quote:
 Originally Posted by bflan0524 i took ownership for a portfolio that was worth 65,000 on Jan 1 at the end of the year it was worth 71,000 i used this calculation 71,000*(12/12)-65,000*(12/12)/(65,000*(12/12))= 9.23% growth
You may find this way simpler:
b = beginning (65000)
e = ending (71000)
g = % growth (?)

g = e/b - 1 = 71000/65000 - 1 = 1.0923 - 1 = .0923 or 9.23% October 15th, 2017, 12:12 PM   #3
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Quote:
 Originally Posted by bflan0524 Hello trying to do a calculation to anualaize growth for an incentive plan i have a fixed value (meaning the relationship was owned for 12 months by one person) and a variable for the fixed value for example i used this an illustration i took ownership for a portfolio that was worth 65,000 on Jan 1 at the end of the year it was worth 71,000 i used this calculation 71,000*(12/12)-65,000*(12/12)/(65,000*(12/12))= 9.23% growth. i inherited some new clients mid year worth 25,000 and at the end of the 6 months they were worth 21,000. so i tried this calculation 21,000*(6/12)-25,000*(6/12)/(25,000*(6/12)) which for this i got (16%) which i am not sure is right also if it is how would i then blend the scores to get their true growth ty
Both the "12/12" and the "6/12" above cancel so have no effect.

Cleary 21000- 24000 is negative 3000. Divided by 25000, -3000/65000 is -12%, not 16%. Since that is for half a year, the "annualized" loss is -24%, 2 times -12%.

To combine the two, "weight" each by the time interval. The first was for one year, the second for 1/2 year. ((9.23)(1)+ (-24)(1/2))/(3/2)= (9.23- 12)/(3/2)= (-2.77)(2/3)= -5.54/3= -1.85... This is a 1.85% loss. Tags equation Thread Tools Show Printable Version Email this Page Display Modes Linear Mode Switch to Hybrid Mode Switch to Threaded Mode Similar Threads Thread Thread Starter Forum Replies Last Post max233 Algebra 2 March 31st, 2017 09:40 PM shaharhada Algebra 2 August 30th, 2016 11:09 AM DarkLink94 Algebra 5 July 4th, 2015 02:32 PM DarkX132 Algebra 3 September 26th, 2014 10:15 PM PhizKid Differential Equations 0 February 24th, 2013 10:30 AM

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