Return Calculation Comparison
An example of the spreadsheet used to perform the return calculations in the “Calculating Investment Returns” post is shown here:
The fields in blue can be edited to compare how the three return methods perform with various starting balances, monthly contributions, and monthly returns. The full spreadsheet can be viewed at this link. If you wish to edit the spreadsheet, just go to “File” and click on “Create a Copy”, you can then edit the fields in blue to compare the return calculation methods for any scenario you wish. The S&P500 returns used to calculate the post examples are included in the second tab of the spreadsheet.
For more detail on mechanics of the three types of return calculations, try the following links:
Money-Weighted Returns (also known as the Dollar Weighted or Internal Rate of Return)
- Wikipedia Entry
- Calculating Money Weighted Return in Excel (the same commands can be used in Google Docs)