An initial investment of $25,000 forty years ago is worth $1,533,913 today. What is the geometric average return on this investment?
A) 9.47 percent
B) 10.84 percent
C) 11.23 percent
D) 11.47 percent
E) 12.08 percent

Question

Quizplus · Accepted Answer

The geometric average return can be calculated using the formula: [(Ending Value / Beginning Value)^(1/n)] - 1, where n is the number of years. Plugging in the values: [(1,533,913 / 25,000)^(1/40)] - 1 = 0.1084 or 10.84 percent.

An Initial Investment of $25,000 Forty Years Ago Is Worth