Sharp EL733A EL-733A Operation Manual - Page 62

Sharp EL733A Manual

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GENERAL INVESTNLENT ANALYSIS Example: Over the years you have invested in mutual funds. Your yield in these funds has been good, though you have never sat down and figured out exactly what that yield has been. One evening you find yourself with some time on your hands, so you pull out your records, take your EL-733A from your briefcase and start calculating. Based on the following table of your investments, what has your return on mutual funds been since 1983? Date 11/15/83 6/1/84 8/15/85 4/30/86 1/15/87 6/1/87 .,/1/87 Fund # 1 1 2 3 2 3 2 Amount Invested 5'000 3'200 2'000 2'000 V750 1'500 4'000 Today is 5/1/88 and the values of the funds as of this date are as follows: • Fund 1: $16355.70 • Fund 2: M921.24 • Fund 3: $4723.75 127 Solution: Even though there are three funds listed with three separate yields, in this case you are interested in the overall, combined yield. This becomes just one problem with all of the investments and current values appearing on one cash-flow schedule. One trick to analyzing this investment is in the way that you choose the period of the cash-flow schedule. Here, the investments took place either around the 1st of a month or around the 15th of a month. So, break each year up into 24 periods, each about 1/2 month. That way, each investment can fall at the end of a period. Once you have calculated the periodic return for 1/2 month periods, you can convert it to reflect monthly compounding if you wish. The cash-flow schedule that you arrive at for this problem will look something like this: 33M00.69 8 zeros 8 zerois 12 zeros \16 zeros 6 zero/s 1\ 5 zeros \ 5 zeros Y1 I ♦ -V000 -V000 -1'500 -3200 -2'750 -4'000 -5'000 This is a difficult one to draw clearly on one line. 121

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GENERAL
INVESTNLENT
ANALYSIS
Example:
Over
the
years
you
have
invested
in
mutual
funds.
Your
yield
in
these
funds
has
been
good,
though
you
have
never
sat
down
and
fi
gured
out
exactly
what
that
yield
has
been.
One
evening
you
fi
nd
yourself
with
some
time
on
your
hands,
so
you
pull
out
your
records,
take
your
EL
-733A
from
your
briefcase
and
start
calculating.
Based
on
the
following
table
of
your
investments,
what
has
your
return
on
mutual
funds
been
since
1983?
Date
Fund
#
Amount
Invested
11/15/83
1
5'000
6/1/84
1
3'200
8/15/85
2
2'000
4/30/86
3
2'000
1/15/87
2
V750
6/1/87
3
1'500
.,/1/87
2
4'000
Today
is
5/1/88
and
the
values
of
the
funds
as
of
this
date
are
as
follows:
•
Fund
1:
$16355.70
•
Fund
2:
M921.24
•
Fund
3:
$4723.75
127
Solution:
Even
though
there
are
three
funds
li
sted
with
three
separate
yields,
in
this
case
you
are
interested
in
the
overall,
combined
yield.
This
becomes
just
one
problem
with
all
of
the
investments
and
current
values
appearing
on
one
cash
-flow
schedule.
One
trick
to
analyzing
this
investment
is
in
the
way
that
you
choose
the
period
of
the
cash
-flow
schedule.
Here,
the
investments
took
place
either
around
the
1st
of
a
month
or
around
the
15th
of
a
month.
So,
break
each
year
up
into
24
periods,
each
about
1/2
month.
That
way,
each
investment
can
fall
at
the
end
of
a
period.
Once
you
have
calculated
the
periodic
return
for
1/2
month
periods,
you
can
convert
it
to
reflect
monthly
compounding
if
you
wish.
The
cash
-flow
schedule
that
you
arrive
at
for
this
problem
will
look
something
like
this:
8
zeros
12
zeros
\16
zeros
6
zeros
/
Y1
I
—V000
—V000
—3200
—2'750
—5'000
This
is
a
difficult
one
to
draw
clearly
on
one
li
ne.
8
zeros
i
33M00.69
15
zeros
\
121
\
5
zeros
♦
-1'500
-4'000