How much money will i have after 3 years?

[TrainHardDieHard]

Ok, i need some help with a math problem regarding stocks and compound returns.

I start with $8,000. I put in $500 a month into my account. I make 50% per year. (In other words, my portfolio at the end of each year is up 50%.)

At the end of 3 years, how much money will i have?

Please show work and thanks in advance! [img]/images/graemlins/smile.gif[/img]

[TrainHardDieHard]

[ QUOTE ]
Its irrelevant. You'll be one of the richest people on earth within two years. Once you can prove those returns you'll have billions of dollars of capital to work with, get to keep 30% of the profits for yourself and have a team of Harvard MBA's to do your accounting for you.

[/ QUOTE ]

it would be irrelevant if i was a hedge fund manager working with 30 billion dollars, but im not.

50% return per year working with only 8-25k is not hard at all, especially if you play options.

the more money you have, the harder it is to make those big returns.

if a hedge fund manager had only 25k to work with, you're damn right he'd be up 200%+ by end of the year. THe more money someone has, the harder it is to find buyers who want to purchase so many shares. Hence, they need to diversify as much as possible, which in effect, lowers there return rate because its so much safer.

[technologic]

[ QUOTE ]
[ QUOTE ]
Its irrelevant. You'll be one of the richest people on earth within two years. Once you can prove those returns you'll have billions of dollars of capital to work with, get to keep 30% of the profits for yourself and have a team of Harvard MBA's to do your accounting for you.

[/ QUOTE ]

it would be irrelevant if i was a hedge fund manager working with 30 billion dollars, but im not.

50% return per year working with only 8-25k is not hard at all, especially if you play options.

the more money you have, the harder it is to make those big returns.

if a hedge fund manager had only 25k to work with, you're damn right he'd be up 200%+ by end of the year. THe more money someone has, the harder it is to find buyers who want to purchase so many shares. Hence, they need to diversify as much as possible, which in effect, lowers there return rate because its so much safer.

[/ QUOTE ]

QFT...i think buffett was quoted here earlier saying something like 1 million dollars is easy to get 50% returns for

[jaydub]

[ QUOTE ]
[ QUOTE ]
Its irrelevant. You'll be one of the richest people on earth within two years. Once you can prove those returns you'll have billions of dollars of capital to work with, get to keep 30% of the profits for yourself and have a team of Harvard MBA's to do your accounting for you.

[/ QUOTE ]

it would be irrelevant if i was a hedge fund manager working with 30 billion dollars, but im not.

50% return per year working with only 8-25k is not hard at all, especially if you play options.

the more money you have, the harder it is to make those big returns.

if a hedge fund manager had only 25k to work with, you're damn right he'd be up 200%+ by end of the year. THe more money someone has, the harder it is to find buyers who want to purchase so many shares. Hence, they need to diversify as much as possible, which in effect, lowers there return rate because its so much safer.

[/ QUOTE ]

Sure, you can't perform (or even google) one of the most basic finance calculations but 50% is in the bag. Post trades and results please.

I'd notify moderators but ahnuld can't be bothered to check that account or update his profile so what's the point.

J

[TrainHardDieHard]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Its irrelevant. You'll be one of the richest people on earth within two years. Once you can prove those returns you'll have billions of dollars of capital to work with, get to keep 30% of the profits for yourself and have a team of Harvard MBA's to do your accounting for you.

[/ QUOTE ]

it would be irrelevant if i was a hedge fund manager working with 30 billion dollars, but im not.

50% return per year working with only 8-25k is not hard at all, especially if you play options.

the more money you have, the harder it is to make those big returns.

if a hedge fund manager had only 25k to work with, you're damn right he'd be up 200%+ by end of the year. THe more money someone has, the harder it is to find buyers who want to purchase so many shares. Hence, they need to diversify as much as possible, which in effect, lowers there return rate because its so much safer.

[/ QUOTE ]

Sure, you can't perform (or even google) one of the most basic finance calculations but 50% is in the bag. Post trades and results please.

I'd notify moderators but ahnuld can't be bothered to check that account or update his profile so what's the point.

J

[/ QUOTE ]

Obviously, there's some discrepency in the answers. I too got 69,750, but after thinking about it for a while, I wanted to double check or see if there were other ways of answering the question. I have to read over some of the replies again to check the work, but 69,750 could very well be wrong.

As for 50% returns per year, I can't believe you people think it is that hard. Look for emerging markets (BRIC-Brazil, Russia, India, CHINA), use technical analysis, do some research, learn options, insider buying... the works.

Perfect example:

2 Weeks ago I was looking at high growth spec stocks and came across Fuel Tech (FTEK). On Sept. 27, the CEO increased his holdings by 20%, as well as 3 other directors purchased shares all within two weeks of each other. It was about 45% off its 52 week high and T/A showed it was oversold and due for a sharp rebound. Furthermore, it just recieved an upgrade from a firm and recently received orders worth over 5 million from CHINA. There was no doubt that this thing was going up. It should hit 40 six-eight months from now, especially since I believe China will want more fuel cell technology with the olympics coming right around the corner.

And there are a ton of stocks just like this...

DISCLOSURE: I own shares of FTEK.

[pig4bill]

[ QUOTE ]
Its irrelevant. You'll be one of the richest people on earth within two years. Once you can prove those returns you'll have billions of dollars of capital to work with, get to keep 30% of the profits for yourself and have a team of Harvard MBA's to do your accounting for you.

[/ QUOTE ]

Uh, no. As others have mentioned, 50% is not all that unusual.

[Parallax]

Not sure I completely get what you are asking but...
$500 x 12 months = $6000 + the initial 8k = 14k after first year.
50% return on 14k = 7k
21k beginning of year 2 plus $6k = $27k + 13.5k = 40.5k
40.5k beginning of year 3 plus $6k = 46.5k + 23.25k =

$69,750

AMIRITE?

[dazraf69]

http://www.dinkytown.net/java/CompoundSavings.html