If Andre purchased a work of art for $500 in 2005 and sold it for $1,500 in 2015, what is his annualized return on the investment?

Name: If Andre purchased a work of art for $500 in 2005 and sold it for $1,500 in 2015, what is his annualized return on the investment?
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Quizplus · Accepted Answer

The annualized return can be calculated using the formula for compound annual growth rate (CAGR): CAGR = [(Final Value/Initial Value)^(1/Number of Years)] - 1. Here, CAGR = [(1500/500)^(1/10)] - 1 = 0.116 or 11.6%.

If Andre Purchased a Work of Art for $500 in 2005