A stock investor deposited $3,450 six years ago. Today the account is valued at $2,180. What annual rate of return has this investor earned?

Question

Quizplus · Accepted Answer

To calculate the annual rate of return, we need to use the formula:
(Ending Value / Beginning Value)^(1/Number of years) - 1

Plugging in the values, we get:

(2180 / 3450)^(1/6) - 1 = -0.0737

Multiplying by 100 to convert to a percentage, we get -7.37%.

Therefore, the answer is B.

A Stock Investor Deposited $3,450 Six Years Ago