The basic problem is that the IRR formula is what’s called an nth root polynomial (n is the number of days in the IRR calculation). A one-year IRR calculation is a 365th root polynomial. (Remember that Quicken calculates daily IRRs and then annualizes these daily percentages.) Continue reading
Tag Archives: investing
Online Investing: Some Mechanical Problems with the IRR
Now that you understand the basic logic of the IRR tool, you should know that the IRR, for all of its usefulness, isn’t flawless. Quicken (and every other investment record-keeper’s computer program) calculates a daily IRR and then multiplies this percentage by the number of days in a year to get an equivalent annual IRR. Continue reading
Online Investing: What Is an IRR?
The IRR tool calculates the annual profit an investment delivers as a percentage of the investment’s value at the start of the year. For example, in a simple case, if you buy an investment for $100 and the investment pays $10 in dividends at the end of the year and then is sold for $95, your IRR is 5 percent. Continue reading
Online investing: Describing Bond Purchases Part (2)
4. Enter the brokerage commission you paid in the Commission box.
You can enter any three of the following four inputs: number of shares, price, commission/fee, or total of sale. Using the three values you do enter, Quicken calculates the fourth value. Continue reading
Online investing: Describing Bond Purchases
Whenever you buy additional bonds, you need to record the purchase and any accrued interest, so you actually record two transactions. As with stocks and mutual funds, you can record bond purchases directly into the register or by using an investment form. Because the investment form approach is easier, it’s the one we’ll describe here. Continue reading