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I have a question on average vs. compunding with regard to…

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I have a question on average vs. compunding with regard to average returns.
Submitted: 5 months ago.Category: Finance
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Answered in 1 minute by:
4/3/2018
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 5 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Finance
Satisfied Customers: 2,877
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Hello!

My name is***** will assist you today.

What is your specific questions?

Average returns is general used to refer to the average annual return.

Compounding return is general when dividends or interest are reinvested and calculated into the return.

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Customer reply replied 5 months ago
Hi,
Thanks for helping with this question. PLease find enclosed a xls file with two tabs. On one tab, I have put actual returns in Column H and the final result after compounding is 9.3 million and in the second tab I put the average value of 4% and the compounding should result in the same number as it is the average, but the number is ***** What am I doing wrong ? Can you help me understand please ?Thanks.
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 5 months ago

I will opt out and let another expert review your work sheet.

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