let the rate be i
220000(1+i)^5 = 270000
(1+i)^5 = 1.2272727...
take 5th root
1+i = 1.0418..
i = .0418 or appr 4.2% correct to the nearest tenth
Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.
1 answer