# what is the rate of return if i invested 386000 and got a return of 500000 in seven years and eight months?

I have invested small amounts at various times in a mutual fund . Over a period of seven years and eight months, i have invested 386000 and the current value of my investment is 500000. What is the rate of my return? What is the formula to calculate the same.

## 4 Replies to “what is the rate of return if i invested 386000 and got a return of 500000 in seven years and eight months?”

1. Sean Roberts says:

You didn’t write whether the money is compounded, and if so, how frequently it’s compounded.

If it’s compounded 1 time per year, then the interest rate is 3.435%
If it’s compounded 4 times per year, then the interest rate is 3.395%
If it’s compounded 12 times per year, then the interest rate is 3.385%
If it’s compounded 365 times per year, then the interest rate is 3.375%

The formula is A = P * (1 + (r/n))^nt
A = amount of money accumulated after n years, including interest
P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
n = number of times the interest is compounded per year
t = number of years the amount is deposited or borrowed for.

This requires a little algebra. Solve for r.

2. Prasha says:

Rate of return is 3.5%. This is the only return you will get from Mutual funds.
It is better to invest in Bank FD which have given you 9% rate of return.

3. PrivateBanker says:

Since you invested over time you cannot calculate the time weighted rate of return with the information you have provided.

IF you had invested all of the money at the beginning, your return would be:
(500,000 – 386,000)/386,000 = 0.2953, or 29.53% over the course of 7 yrs & 8months, or 7.667 years
the annual equivalent compound rate would be: 1.2953^(1/7.667) – 1 = 0.0343, or about 3.43%

See the link for calculating the time weighted return. You’ll need the dates of your contributions and the balance of the account on those dates.

4. Raj says:

Its 3.5%

Regards
Raj Chowdary