This page contains a collection of practical “How to guides” describing to how I calculate and apply the various measures and formulae used in somethingsdontchange.com posts.
The formula to adjust for inflation is:
[Real Amount] = [Nominal Amount] * ( [Later Period Index Value] / [Earlier Period Index Value] )
The formula to unitise your portfolio is:
[Unit Count] = [Initial Portfolio Value] / [Initial Unit Price].
Ever wondered how to make $1 million in one hour? Read how fully utilising your tax-advantaged savings account limits, and invest the balance in a low-cost index tracker fund can generate $1 million with as little as one hour of elapsed effort.
The formula to calculate a compound annual growth rate (CAGR) is:
[CAGR] = ( ( [Final Value] / [Inital Value] ) ^ ( 1 / ( [Ending Year] – [Starting Year] ) ) ) – 1
Stay tuned, more to come…
Disclaimer: This information is general in nature and does not constitute personal financial advice.
- If you liked this post then please share it with your friends.