SOLUTION: Microsoft's stock price peaked at 6118% of its IPO price more than 13 years after the IPO.� Suppose that $15,000 invested in Microsoft at its IPO price had been worth $900,000 (600

Question 978805: Microsoft's stock price peaked at 6118% of its IPO price more than 13 years after the IPO.� Suppose that $15,000 invested in Microsoft at its IPO price had been worth $900,000 (6000% of the IPO price) after exactly 13 years. What interest rate, compounded annually, does this represent? (Round your answer to two decimal places.)
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
P=Po{1+r}^13; r is the interest rate
900,000=15000 {1+r}^13
60={1+r}^13
ln of both sides
4.093=13 ln{1+r}
divide by 13
0.3148=ln (1+r)
raise to e power
1.3700 (NOTE: I have not rounded on the calculator until the end)
1.3700=1+r
r=37% or 0.37

RELATED QUESTIONS
Microsoft's stock price peaked at 6118% of its I.P.O. price more than 13 years after the... (answered by Boreal)

Fred and Staci Whittingham own 40 shares of Procter and Gamble stock and 25 shares of... (answered by Boreal)

Dave and Judi Mihaly own 50 shares of Microsoft and 50 shares of Apple. At the close of... (answered by mananth)

Bisi invested $245,000 in 7% stock at $98 and sold the stock when it's price rose to... (answered by ewatrrr)

There is some evidence that, in the years 1981-85 , a simple name change resulted in a... (answered by stanbon)

Norman and Suzanne own 33 shares of a fast food restaurant stock and 67 shares of a toy... (answered by checkley77)

Norman and suzanne own 37 shares of a fast food restaurant stock and 71 shares of a toy... (answered by TimothyLamb)

Norman and Suzanne own 39 shares of a fast food stock and 71 shares of a toy company... (answered by jorel555)

Norman and Suzanne own 28 shares of a fast food restaurant stock and 68 shares of a toy... (answered by ikleyn)