You purchased a piece of property for $30,000 nine years ago and sold it today for $83,190. What was the rate of return on your investment?

Question

Quizplus · Accepted Answer

The rate of return can be calculated using the formula for compound annual growth rate (CAGR): CAGR = (Ending Value/Beginning Value)^(1/Number of Years) - 1. Plugging in the values: CAGR = ($83,190/$30,000)^(1/9) - 1 ≈ 0.12 or 12%.

You Purchased a Piece of Property for $30,000 Nine Years