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Question: this is an example of the how one might conclude...

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This is an example of the how one might conclude the wrong thing when looking at mutual fund returns from year to year...... In 2008 a fund lost 37.13% and gained 65.71% in 2009.... Then in 2010 it gained 12.66%,0 so if one added -37.13 to +65.71 to +12.66%.... the numbers come to positive 41%.... Giving the impression that one would have made about 41% over those three years....... However if ones applies actual numbers to history, it comes out differently...... If one started with $100 and then it went down 37.13% ($37.13) than one would have $62.87...... the following year went up 65.71%..... in which would have brought it $104..... The next year it went up 12.66% which brings it to $117..........

So a net gain of 17% over 3 years..... A far cry from 41% that it would look like with just simple math.....

I am looking for a formula that one could apply to this type of scenario so as to arrive at a final number which reflects an accurate final return. ......Can you do this? If so, how much would you like to receive in order to arrive at a formula that one could use in order to arrive at the correct final return?
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