
1. Re: how to calculate annual rate of return on investment
SteveMartino Aug 25, 2013 8:04 PM (in response to danielgardner)Are you asking how its calculated? Or how to use the functions to calculate?
Did you try the financial functions? Or some custom functions:
http://www.briandunning.com/filemakercustomfunctions/results.php

2. Re: how to calculate annual rate of return on investment
danielgardner Aug 25, 2013 11:54 PM (in response to SteveMartino)Here is the simplest calcualtion I've found for calculating an annual compound rate;
Calculating Compound Annual Growth Rate (CAGR)
In order to calculate CAGR, you must begin with the total return. In our above example, the total return was 2.3377 (133.77%). We also know the investment was held for ten years.
Multiply the total return (2.3377) by the X root (X being the number of years the investment was held). This can be simplified by taking the inverse of the root and using it as an exponent. In our example, 1/10, or .10 (had the number of years been 2, you could have taken 1/2 or .5 as the exponent, 3 years would be 1/3 or .33 as the exponent, four years would be 1/4 , or .25, and so on and so forth.)
In our above example, CAGR would be calculated as follows:
2.377^{(.10)} = 1.09, or 9% compound annual growth rate (again, recall the 1.0 represents the principal value which must be subtracted; ergo, 1.09  1.0 = .09, or 9% CAGR expressed as a percentage).
In other words, if the gains on the Pepsico investment were smoothed out, the investment grew at 9% compounded annually. To check the result, use the future value of a single amount. In essence, this means that if the investor had taken the $15,000 to a bank for ten years and earned 9% on her money, she would have ended up with the same balance of $35,300 at the end of the period.
I was going to build a calculation, to copy these steps, but I got thrown off by the part I bolded and underlined. How do you perform that root equation? Can it be dynamic for multiple entries based on different total returns and length of time investment was held? I was hoping to crete a calculation using the information from the database fields to genrate a report showing the annual growth rate for each entry and averaged toal.
The more I talk about it the more complicated I find it to be. I've been unable to find a simple calculation for this.
Thanks!
Dan

3. Re: how to calculate annual rate of return on investment
steve_ssh Aug 26, 2013 3:20 AM (in response to danielgardner)danielgardner wrote:
Here is the simplest calcualtion I've found for calculating an annual compound rate;
...
In our above example, CAGR would be calculated as follows:
2.377^{(.10)} = 1.09, or 9% compound annual growth rate (again, recall the 1.0 represents the principal value which must be subtracted; ergo, 1.09  1.0 = .09, or 9% CAGR expressed as a percentage).
...
I was going to build a calculation, to copy these steps, but I got thrown off by the part I bolded and underlined. How do you perform that root equation?
Hello Daniel,
Within the FileMaker calculation expression edtior dialog, the above equation (which you put in bold) would read as follows:
2.377 ^ ( 1/ 10 )
The exponential operator ( ^ ) is available at the bottom of the scrolling operator list (just after the logical function operators).
HTH & Best,
steve