Wendel invests 6600 dollars in a mutual fund on January 1 On

Wendel invests 6600 dollars in a mutual fund on January 1. On June 1, his fund balance is 3400 dollars. Wendel notices the decline, and withdraws 1500 dollars. On September 1, his fund balance is 7700 dollars, and he then invests an additional 1100 dollars. On the following January 1, his fund balance is 7900 dollars. What is Wendel\'s time-weighted rate of return? Answer =

Solution

Total Invested: 1100+6600=7700

Total Return : 1500 + 7900 = 9400

In One year the return is 9400 on investment of 7700

Rate of return = (9400/7700)*100=1.22%

or return is 22% of invested value.

Date	Invest	Return	Valuation
1st Jan	6600	-	-
1st June		1500	3400-1500 =1900
1st Sept	1100		7700+1100=9900
1st Jan			7900