Comments on: What is the annual worth and future worth of the investment? Give the solution step by step? http://freeinvestment2u.info/what-is-the-annual-worth-and-future-worth-of-the-investment-give-the-solution-step-by-step/174/ Investment information for everyone Wed, 31 Mar 2010 22:00:28 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: chillininvt http://freeinvestment2u.info/what-is-the-annual-worth-and-future-worth-of-the-investment-give-the-solution-step-by-step/174/comment-page-1/#comment-291 chillininvt Thu, 11 Mar 2010 21:04:05 +0000 http://freeinvestment2u.info/what-is-the-annual-worth-and-future-worth-of-the-investment-give-the-solution-step-by-step/174/#comment-291 There is no formula it really depends on how well the company does. Some companies will take them 5 or 6 years of cooking the books before they start making any money. THe best formula for an anual return is self evaluation. Go look at the filiing for the company. Say a company is trading at $7 per share but you think they could gain value at there current growth rates. So you take a look at the average rate of growth that the company grows each year. We'll say 14% or something. So if a company grows at a 14% different each year. THat would be this. (7 * 0.14) + 7 + dividends = value of compnay at current growth for a year. Then figure out that value and do the same thing. If you take all your dividends and buy more share you can get a nice compounding effect going on. Its pretty simple. WHat I do is look at there balance sheet. What is the market cap, average growth rate, volitity. There is no formula it really depends on how well the company does. Some companies will take them 5 or 6 years of cooking the books before they start making any money. THe best formula for an anual return is self evaluation.

Go look at the filiing for the company. Say a company is trading at $7 per share but you think they could gain value at there current growth rates. So you take a look at the average rate of growth that the company grows each year. We’ll say 14% or something. So if a company grows at a 14% different each year. THat would be this.

(7 * 0.14) + 7 + dividends = value of compnay at current growth for a year.
Then figure out that value and do the same thing. If you take all your dividends and buy more share you can get a nice compounding effect going on.

Its pretty simple. WHat I do is look at there balance sheet. What is the market cap, average growth rate, volitity.

]]> By: spitfiredd http://freeinvestment2u.info/what-is-the-annual-worth-and-future-worth-of-the-investment-give-the-solution-step-by-step/174/comment-page-1/#comment-290 spitfiredd Wed, 10 Mar 2010 04:39:25 +0000 http://freeinvestment2u.info/what-is-the-annual-worth-and-future-worth-of-the-investment-give-the-solution-step-by-step/174/#comment-290 Time value of money PV=FV/(1+i)^n PV=Present Value FV=Future Value i=interest rate n=number of compounding periods In your case PV= -1650 (negative sign indicates money going out) FV=12,283,904 n=32 (in years) There fore; i=32.13% Time value of money

PV=FV/(1+i)^n
PV=Present Value
FV=Future Value
i=interest rate
n=number of compounding periods

In your case
PV= -1650 (negative sign indicates money going out)
FV=12,283,904
n=32 (in years)

There fore;
i=32.13%

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