Question

Assume today is April 14th, 2017.

Rod learned about BitCoin in 2016. He decided to create an account that automatically deposits (invests) $20 every paycheck. He gets paid every two weeks, and deposits occured every other Friday starting August 5, 2016. His account costs him $5 per month and has a transaction fee of $1 per transaction. As of today, he has made 20 deposits. When he started buying, it was valued at $600 per 1 BitCoin. Today's value per BitCoin is $2040. Rod currently owns 0.892 BitCoins. Question: Was this a good investment? What was his return? Please include as many details as needed to get your point across.

Answer 1

Total investment value as on Apr 14th, 2017 = 0.892 * $ 2,040 = $ 1,819.68

The cash flows look like the below.

The IRR can then be computed. We have cash flows and Future value

IRR = 14% (but this is not per annum, this is fortnightly)

Annual IRR = 14%*52/2 = 359.90%