- an initial deposit of $2,500,000
- Then, every year end we make a deposit of $750,000
- We make this same deposit for 13 years
- At the end, we have a final value of $50,000,000
- Our system calculates a Cumulative TWR of 855.29%
- Our system calculates an Annualized TWR of 17.53%
- This site validation calculates an Annualized TWR of 17.35%
To validate this Annualized TWR number of 17.53%:
- We created an ss, set the initial value to $2,500,000, in the next cell calculated Profit + Beginning Value using Ann TWR.
- In the next line, we added the deposit of $750,000 to the previous portfolio value, calculated Profit + Beginning Value using Ann TWR and repeated the exercise for 13 years.
We were hoping to get $50,000,000 at the end, but got $60,033,198.
Did we try to validate the Annualized TWR the correct way? Obviously, if we had correctly worked out the validation, we should have received $50,000,000 at the end but the number was $60,033,198.