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Thursday, February 14, 2008

Yield of an investment

Dear Mr. Tan,
How do I calculate the yield on an investment?

REPLY:
You can use a financial calculator.

For example, if you invest $1,000 yearly for 20 years and earn a yield of 5% per annum, you will get $34,719 at the end of 20 years.

If you enter the figures of $1,000, $34,719 and 25 years into the calculator, it will be able to compute the yield as 5%.

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