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Create or write the formulas in the spreadsheet and show your-(Answered)

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Create or write the formulas in the spreadsheet and show your work at arriving at your solutions in order to receive full credit.

A company invests $1,000,000 at the beginning of the year. It adds another $250,000 at the end of the first quarter, withdraws $350,000 at the end of the second quarter, adds $145,000 at the end of the third quarter, and withdraws $450,000 of the remaining funds at end of the year. It earns $20,000 of interest in the first quarter, $17,000 in the second quarter, $12,000 in the third quarter, and $29,000 in the fourth quarter. a. What is the annual effective rate earned on the investment on the investments portfolio? b. What rate of return would have been calculated if one only looked at the ending portfolio value as compared with the beginning $1,000,000 investment?


Quarter

 


 

CF

 

0

 

1

 

2

 

3

 

4

 


 

A)

 

B)

 


 

Interest

 

-1000000

 

-250000

 

350000

 

-145000

 

450000

 


 

Effective rate

 

Return

 


 

Total

 

-1000000

 

20000 -230000

 

17000 367000

 

12000 -133000

 

29000 479000

 


 

-16.34%

 

45.00%

 


 

 

Paper#9210764 | Written in 27-Jul-2016

Price : $19
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