An investment of $10,000 in the
Emerging Country Debt Fund in 2001 was worth $24,780
in 2006 find the 5-year average annual
return.
2 answers
Are you really taking a school class called "help?"
Since S=24,780 and P=10,000, you get
r = (24,780/10,000)^(1/(5-1)] = 1.2546 = 125%
Comment: The "1" might refer to the investment at the beginning of each year;
then the 0.25 would be the interest rate.
For example 10,000*(1+0.2546)^4 = $24,775
This would be the value after 4 years if 10,000 was compounded yearly
at 25%
r = (24,780/10,000)^(1/(5-1)] = 1.2546 = 125%
Comment: The "1" might refer to the investment at the beginning of each year;
then the 0.25 would be the interest rate.
For example 10,000*(1+0.2546)^4 = $24,775
This would be the value after 4 years if 10,000 was compounded yearly
at 25%
1 answer