Should we be adding the components or multiplying? For instance if you have spending of 5, inflation of 2, and growth of 1? Do you use 8 or 8.17? Schweser from what I remember multiples them however I have seen CFAI add them. I thought it makes more sense to multiple-it takes into account compounding and multiple yrs; only reason to add I would think would be a single year, and IPS are l-t. -Thanks.
Both will be fine. I have seen answers on CFAI exams that shows both answers either addition or multiplication are ok. For IPS just do addition.
Just don’t go switching your methods in between calculations…