1000(1+r)^15 = 39533.32
(1+r)^15 = 39.53332
1+r = 1.2778
r = 0.2778 = 27.78%
is that a sane answer? yes, since it doubled over 5 times in 15 years, or every 3 years. The rule of 72 says that a rate of 24% will double about every 3 years.
Your grandmother opened an investment account of $1,000(initial deposit) 15 years ago.
Today it's worth $39,533.32
What is average annual rate of return that she earned?
Thank you.
1 answer
1 answer