Question

An investment earns 10% the first year, earns 15% the second year, and loses 12% the third year. the total compound return over the 3 years was ______.

Answer 1

The compound return over 3 years is 3.67%. This is found by evaluating the following expression: (1.10*1.15*0.88)^1/3 - 1 = 3.67%.