Personal Finance & Money Asked on May 17, 2021
Every two weeks in 2020 (thus, 26 times), I’ve contributed some money (usually about $200, but sometimes more or less) to a bond fund. The starting value was $21000
and the current value is $28500
. I’m trying to determine the annualized performance of this "annuity".
Because the contributions were so variable, I decided that the proper course was to calculate 26 future values using the formula (1+ r/26)p, where r
is the annualized performance, and p
is the number of periods left in the year, and then sum them up.
Thus, add $21000
to the results of these 26 formulas to get $28000
.
But the problem is that the only value for r
which makes the series work is 33%
, and that can’t be right (if for no other reason than this is a Total Bond Index fund).
What am I doing wrong?
Periods
Until EOY Formula
26 $164 * (1+.33/26)^26 = $ 227
25 $201 * (1+.33/26)^25 = $ 276
24 $986 * (1+.33/26)^24 = $1344
23 $201 * (1+.33/26)^24 = $ 272
...
4 $101 * (1+.33/26)^4 = $ 106
3 $201 * (1+.33/26)^3 = $ 209
2 $201 * (1+.33/26)^2 = $ 206
1 $201 * (1+.33/26)^1 = $ 204
-----
Sum $7416
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