Intuitively you would have endogeneity problems between those two variables. So use Durbin-Wu-Hausman to test for this, and then run 2SLS/IV.

I think (Monthly Sharpe)*12^.5 should work.

There should be no negatives in your r-squared. Perhaps you're blowing up the regression by having multicollinearity among your indexes. Bill Sharpe's article in the Journal of Portfolio Management in Winter 1992 should help.

With PV=-923.14, FV=1000, i=5, and N= 30, I get an answer of 9.00%. What am I doing wrong?--j