Question

Your grandmother gave you $390 for your birthday, which you invested in a mutual fund on January 1, 2012. On June 1, 2012, she gave you $720 for your high school graduation, which you immediately deposited into your mutual fund. On January 1, 2013, found that your dollar-weighted rate of return for the previous year was 8%. On April 1, 2013 your fund balance was $1700, and you then deposited $X, which your grandmother gave you for college. On January 1, 2014, your fund balance was $1800, and you calculated that your time weighted rate of return for the previous year was 11.9%. What is X? Note: Assume months of equal length, and assume that simple interest is used to calculate the dollar weighted rate of return.

Answer = $ (3 decimal place)

Answer 1

Particulars	Amount ($)	No of Months	Sum Product
Investment as on 1st Jan 22012	390	12	4680
Investment as on 1st Jun 22012	720	7	5040
Total	1110		9720
Return in $ (Sumproduct*8%/12)	64.8
Fund balance as on 1st Jan 2013	1174.8
Fund Balance as on 1st Jan 2014	1800
Inveestment on 1st April 2013	X
Return in %	11.90%
Value of X	((1174.8*12+X*9))*11.9%/12+1174.8+X=1800
Investment value on 1st Apr 2013 will be $ 445.64645