what annual growth rate is required to triple your investment over the course of 10 years? quizlet

by Darius Yost 9 min read

What are the growth rates for each of the years?

You can put this solution on YOUR website! Hi. What rate of interest compounded annually is required to triple an investment in 10 years? A= p (1+r)^t. A/p …

How much interest is required to Triple an investment in 29 years?

Jun 01, 2020 · Sum of Growth Rates = [42.4 % + 9.7 % + 101.3 % + 101.3 % + (-10.5 %) + (-10.6 %)] = 233.6% . AAGR = 233.6 % / 7 = 33.4%. The average annual growth rate for ABC Company is 33.4%. Average Annual Growth Rate (AAGR) Restrictions in Financial Analysis. Consider a portfolio that grows by 25% in the first year and 12% in the following year.

What is the average annual growth rate (AAGR) of the portfolio?

Dec 03, 2014 · All you need to do is divide the number 72 by your projected growth rate. If you want to know how long it would take to triple it however, Andy Kiersz at …

What is the constant growth rate of return on investment?

Jul 03, 2017 · At a rate of interest of 3.86% compounded annually investment will be tripled. An amount I invested for 29 years at a rate of r% compounded annually becomes I(1+r/100)^29 but as it triples, it must have become 3I and hence I(1+r/100)^29=3I or (1+r/100)^29=3 or 29log(1+r/100)=log3 or log(1+r/100)=log3/29=0.01645 or 1+r/100=10^0.01645=1.0386 or …

What is investment portfolio?

Investment Portfolio An investment portfolio is a set of financial assets owned by an investor that may include bonds, stocks, currencies, cash and cash equivalents, and commodities. Further, it refers to a group of investments that an investor uses in order to earn a profit while making sure that capital or assets are preserved.

What is the AAGR of a portfolio?

Consider a portfolio that grows by 25% in the first year and 12% in the following year. The average annual growth rate (AAGR) would be calculated as 18.5%. The fluctuations in the return rate of the portfolio between the start of the first year and the end of the year are not taking into consideration the average annual growth rate calculation.

What is AAGR in accounting?

It is relevant to nearly any form of financial metric analysis, such as the growth rate of earnings#N#Income vs Revenue vs Earnings Income, revenue, and earnings are probably the three most widely used concepts in accounting and finance. All the terms denote measures of a#N#, sales, cash flow, expenditures, etc., to give investors an indication of the direction in which the firm is going. The AAGR depicts, on average, what the annual returns have been.

What is AAGR in investment?

The AAGR is a benchmark for calculating the average return on investments over a number of years. Essentially, it is the basic average growth rates of return for a sequence of periods (years).

How to find the AAGR of a time period?

Once the growth rate percentages for each time period have been calculated, they are added together and divided by the total number of the time periods, giving the AAGR.

What is the AAGR?

The average annual growth rate (AAGR) is the average increase or decrease in the value of an investment asset, portfolio, or cash flow over a specified period of time.

What is rate of return?

Rate of Return The Rate of Return (ROR) is the gain or loss of an investment over a period of time copmared to the initial cost of the investment expressed as a percentage. This guide teaches the most common formulas

How to find growth rate in equity without external financing?

10. The growth rate in equity without any external financing is determined by multiplying the payout ratio by the return on equity (ROE).

What is retention rate divided by?

retention rate divided by return on equity.

What was Hunter Corporation's dividend payout ratio in 1999?

17. Hunter Corporation had a dividend payout ratio of 63 percent in 1999. The retention rate in 1999 was

What is an overvalued investment?

1. An overvalued investment is so expensive that we will not receive a fair return if we bought it.

What are the two components required to carry out asset valuation?

7. The two components that are required in order to carry out asset valuation are (1) the stream of expected cash flows and (2) the required rate of return.

How much did Ross pay in dividends in 1990?

16. Ross Corporation paid dividends per share of $1.20 at the end of 1990. At the end of 2000, it paid dividends per share of $3.50. Calculate the compound annual growth rate in dividends.

What is the average annual growth rate?

The average annual growth rate (AAGR) is the average increase in the value of an individual investment, portfolio, asset, or cash stream over the period of a year.

Why is annual growth rate important?

The average annual growth rate is helpful in determining long-term trends. It is applicable to almost any kind of financial measure including growth rates of profits, revenue, cash flow, expenses, etc. to provide the investors with an idea about the direction wherein the company is headed.

What is the AAGR of a portfolio?

Because AAGR is a simple average of periodic annual returns, the measure does not include any measure of the overall risk involved in the investment, as calculated by the volatility of its price. For instance, if a portfolio grows by a net of 15% one year and 25% in the next year, the average annual growth rate would be calculated to be 20%. To this end, the fluctuations occurring in the investment’s return rate between the beginning of the first year and the end of the year are not counted in the calculations thus leading to some errors in the measurement.

What is the AAGR measure?

AAGR is a linear measure that does not account for the effects of compounding—to account for compounding, compound annual growth rate (CAGR) would be used instead.

Why is AAGR used in economics?

AAGR is used in many fields of study. For example, in economics, it is used to provide a better picture of the changes in economic activity (e.g. the annual growth rate in real GDP).

How to calculate AAGR?

The AAGR is calculated as the sum of each year's growth rate divided by the number of years:

Does AAGR include periodic compounding?

Furthermore, the AAGR does not account for periodic compounding.