Actuarial Exam 2/FM Prep: An Interest Rate that is Both Dollar- (Money-)Weighted and Time-Weighted

Exercise 5.2.3: On January 1, 2013, an investment account is worth 100,000. On April 1, 2013, the value has increased to 103,000 and 8,000 is withdrawn. On January 1, 2015, the account is worth 103,992. Assuming the dollar-weighted (money- weighted) method for 2013 and a time-weighted method for 2014, the effective annual interest rate was x for both 2013 and 2014. Calculate x.

Financial Math for Actuarial Exam 2 (FM), Video #134. Exercise 5.2.3 from "Mathematics of Investment and Credit", 7th Edition, by Samuel A. Broverman.

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