Hello,
In France, the Livret A is a passbook savings account whose interest rate is regulated by the public authorities. The addition method I use is simple: I consider that I am buying shares of €100 for my initial and subsequent payments and I make this price of €100 evolve by taking into account the interest paid annually to ultimately have via the quotation the amount of my total assets and that PP can give me the TTWROR, the TTWROR p.a. and the IRR.
Except that, while over the period for which I am adding my data (2020-2024) the administered rates were close to 3%, PP is giving me a TTWROR p.a. and an identical IRR of 1.78%.
My method seems flawed. Is it the right one?
Thank you for your feedback.
dregnier
I would use a deposit account, and add the interest each year when you receive them
Hello spartok,
Thanks for your feedback.
I’ve already tried what you suggest except that PP doesn’t calculate TTWROR and IRR for deposit accounts.
That said, I’ve just realised that I was wrong about historical interest rates. Although the previous rate was 3%, I forgot that at the start of 2020 this rate was 0.50%.
And if we take a weighted average of the historical rates from 2020 to 2024, we find … 1,68%.
So PP’s result is completely consistent.
I’m sorry to have contacted you by mistake.
All the best.
dregnier