Back on September 8, 2015 I had a post call Chained Returns with an Excel spreadsheet. It was a calculator for chaining together periodic rates of return and calculating the annual yield (APY) and the periodic equivalent rate of return (APR). The data inputs (yellow cells) looked like this:
After you entered the periods (fractions of a year), the APY and APR are returned. In this sample, the rates were quarterly, so the number of years was also an output (2.75 years).
Assume that after you have made these calculations for your boss, he/she asks what final return this next quarter would be needed to earn a 9.00% APY for the full three years. That is what this new spreadsheet is for.
Enter the required APY (in this case 9.0%) and the answer is returned (3.420%). The extended answer is more accurate, so copy/past the answer into the cell after the last quarterly number, and the calculator now equals a 9.00% APY.
The math used to calculate the answer looks like this: