Assume that the money in your investment account grew from $30,000 to $60,000 in 9 years. What was your approximate annual rate of return?

Question

Quizplus · Accepted Answer

To find the annual rate of return, we can use the formula: 
[(Ending Value / Beginning Value) ^ (1 / Number of Years)] - 1
Plugging in the numbers, we get:
[($60,000 / $30,000) ^ (1 / 9)] - 1 = 0.078 or 7.8%
Therefore, the approximate annual rate of return was 7.8%, which is closest to choice C.

Assume That the Money in Your Investment Account Grew from $30,000