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  
Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,130 Thanks: 1003  Quote:
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  
Math Team Joined: Jan 2015 From: Alabama Posts: 3,264 Thanks: 902  Quote:
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.  

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