Answer:
The annual rate of return is -2.83%
Explanation:
The annual rate can be calculated from the formula FV=PV*(1+r)^N
Where FV is the future value of the investment
PV is the amount invested which is $276,500
N is 9 years
213600=276,500*(1+r)^9
213600/276500=(1+r)^9
divide index on both sides by 9
(213600/276500)^1/9=1+r
(213600/276500)^1/9-1=r
r=-0.02827109
r=-2.83%
Hence the annual rate of return on the investment is -2.83%, which means the investment depleted by 2.83% from initial invested amount of $276,5000 to $213,600 after nine years
Answer:
-2.83%
Explanation:
Given that
n = 9 years
Present value = 276500
Future value = 213600
Since
FV = PV (1 + r) ^n
213600 = 276500 (1 + r)^9
Therefore
r = (213600/276500)^1/9 - 1
r = (0.7725)^1/9 - 1
r = 0.9717 - 1
r = - 0.0283 or -2.83%
