JeffH, my math is not off. I assumed a rebalance that was not stated. Hopefully everyone is now rebalancing portfolios on a regular basis, if not on a calendar basis, then on some type of trigger point basis.
I have a degree in mathematics and think I can handle some basic compound returns.
If I have to spell it out for you:
Investment 1's $50 grows to $70 after year 1 and Investment 2' $50 "grows" to $45, yeilding a total of $115.
In year 2, Investment 1's $57.50 "grows" to $46 and Investment 2's $57.50 grows to $74.75 for a total of $120.75... which is approximately 121%.
Good luck with your investments.