You discover an antique in your attic that you purchased at an estate sale 10 years ago for $400.You auction it on eBay and receive $8,000 for your item.What annual rate of return did you earn?
A) 200.00%
B) 34.93%
C) 30.47%
D) 20.00%

Question

Quizplus · Accepted Answer

The annual rate of return can be calculated using the formula:
[(final value/initial value)^(1/number of years)] - 1
In this case, the initial value is $400, final value is $8,000, and number of years is 10. Plugging in these values, we get:
[(8,000/400)^(1/10)] - 1 = 0.3493 or 34.93%
Therefore, the best choice is B.

You Discover an Antique in Your Attic That You Purchased