Return on investment - average return i

Calculus Level 3

Suppose you have an investment, worth S ( t ) S(t) , that has a constant rate of return, r = 18 % r=18\% per day.

After 5 days, by what percentage has the value of your investment increased?

Assumptions

  • S ( 0 ) ≠ 0 S(0)\neq 0


The answer is 128.7757757.

Josh Silverman by Josh Silverman

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1 solution

Brahmam Meka
May 4, 2014

1 +18/100 =1.18 ' 1.18 * 1.18 * 1.18 *1.18 *1.18 =2.28775776 2.28775776 - 1 = 1.28775776 1.28775776 *100 =128.775776

4 Helpful 0 Interesting 0 Brilliant 0 Confused

Please explain in detail how u did it.I calculated considering compound interest.please tell me

aditya mahadik - 7 years, 1 month ago

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@aditya mahadik , here, the interest, at the end of every day, will be multiplied by 1.18 1.18 , which means, net investment is changed everyday (increased by 18 % 18\% of that day's net investment).

Sheikh Sakib Ishrak Shoumo - 7 years ago

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sorry, that would be 18 18 %

Sheikh Sakib Ishrak Shoumo - 7 years ago

Future Value ( One dollar investment) = $1 ( 1+0.18)^5=2.28776 dollars after 5 days of compounding. Hence, the percentage increase is (2.28776-1)/1* 100% = 1.28776*100%= 128.776 %

Venture HI - 6 years, 8 months ago

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