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I have the following scenario where i invest variable amount of principal every month,

Investment Month
$300       Jan
$200       Feb
$100       Mar

and i get a return of,

Returns    Month
$1000      Apr

How do i calculate the nominal annual interest rate if the amount is compounded monthly?

skaffman
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josh
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1 Answers1

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300*(1 + p/12)^(3) + 200*(1 + p/12)^(2) + 100*(1 + p/12)^(1) == 1000

Use bisection or something else to solve numericaly.

p=286%

EDIT: Best way to solve this numericaly is to apply Newton–Raphson method, since this equation can be simply derivated analytically.

Luka Rahne
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