SOLUTION: Please help with this question, many thanks. Lily invested $50,000 in a boutique 4 years ago. Her investment is worth $80,000 today. What is the effective rate (annual effective y

Question 1025822: Please help with this question, many thanks.
Lily invested $50,000 in a boutique 4 years ago. Her investment is worth $80,000 today. What is the effective rate (annual effective yield) of her investment? Round your answer to two decimal places.
( Use: R_eff=(〖A/P)〗^(1/t)- 1 , where an initial investment of $P grows to an accumulated amount of $A in t years. )

Answer by rothauserc(4718) (Show Source): You can put this solution on YOUR website!
Using the given information and the R_eff formula
:
R_eff = [ ( 80000 / 50000 ) ^(1/4) ] - 1
:
R_eff = 0.12468265 approx 0.12
:

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