Return Requirement Add or Multiple

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…