An antique was originally purchased 50 years ago for $2 and today is worth $600.What is the approximate annual rate of return realized on the sale of this antique?
A)18 percent
B)12 percent
C)9 percent
D)13 percent

Question

Quizplus · Accepted Answer

The formula for annual rate of return is ((Current value / Original value)^(1/number of years)) - 1. Plugging in the values, we get ((600/2)^(1/50)) – 1, which simplifies to approximately 0.12 or 12%. Therefore, the annual rate of return realized on the sale of this antique is approximately 12%.

An Antique Was Originally Purchased 50 Years Ago for $2