Question

An investment earns 10% the first year, 15% the second year and loses 12% the third year. Your total compound return over the three years was

Answer 1

Answer: 11.32%

Explanation:

Given the above variables, the total compound return can be calculated by;

= (1 + r)(1 + r₂)(1 + r₃)...(1 + rn) - 1

= (1 + 10%)( 1 + 15%) (1 - 12%) - 1

= 11.32%