Question: How do you find geometric average return when monthly EAR/APR is the same? Excel sheet below for reference File Home x Insert Calibri Page Layout
How do you find geometric average return when monthly EAR/APR is the same? Excel sheet below for reference
File Home x Insert Calibri Page Layout Formulas Font Data Review View Automate Developer Number Help JMP Power Pivot Conditional Formatting v Format as Table v Cell Styles v Analytic Solver Format v cells 3.0% Correct Answer 0.2500% 0.2466% $206, 375 $203,890 145.68% 142.73% 3.04% 3.00% Ending Balance $4,207.17 $4,414.84 $84,623.03 Comments Paste Clipboard Ready Sort & Find & Filter v Select v Editing Sensitivity Sensitivity Add-ins Add-ins Analyze Data Alignment Build a model to project your savings account balance over the next 30 years. Assume the expected return is 3%. First, conduct the analysis assuming that 3% is an APR. Second, conduct the analysis assuming that 3% is an EAR. Use your model to answer the following questions: What is the monthly return if the expected return is an APR? What is the monthly return if the expected return is an EAR? What is the ending balance after 30 years if the expected return is an APR? What is the ending balance after 30 years if the expected return is an EAR? What is the total return over 30 years if the expected return is an APR? What is the total return over 30 years if the expected return is an EAR? What is the geometric average return over 30 years if the expected return is an APR? What is the geometric average return over 30 years if the expected return is an EAR? Month Starting Balance $4,000 $84,210.00 $84,420.53 APR Calculations Monthly Return 0.25% 0.25% 0.25% Ending Balance $4,210.00 $4,420.53 $84,631.58 Starting Balance $4,000 $4,207 $84,415 Exercise 4 Styles Expected Return Starting Balance Your Answer 0.2500% 0.2466% $206,375 $203,890 145.68% 142.73% EAR Calculations Monthly Return 0.2466% 0.2466% 0.2466% Instructions Stock Returns Exercise 1 Exercise 2 Exercise 3 Accessibility: Investigate Results
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