Answer:
-2.33%
Explanation:
An investor who was not as astute as he believed invested $263,000 into an account 11 years ago,
Given that,
Current value of account, future value = $202,800
Value of invested amount, Present value = $263,000
Time = 11 years
[tex]Present\ value=\frac{Future\ value}{(1+r)^{n}}[/tex]
[tex]263,000=\frac{202,800}{(1+r)^{11}}[/tex]
[tex]263,000(1 + r) ^ {11} = 202,800[/tex]
[tex](1 + r) ^ {11} = \frac{202,800}{263,000}\\[/tex]
[tex](1+r)=(0.7711026616)^{\frac{1}{11}}[/tex]
(1 + r) = 0.9766466684
r = 0.9766466684 - 1
= - 0.02335333157
= - 2.33%
Therefore, the annual rate of return on this account is -2.33%.
