document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=179530>Question 179530</A>This question is from textbook <A HREF=http://www.amazon.com/exec/obidos/ASIN/0072450282and0072476028AIE/algebrahomeworkh>Elementary and Intermediate Algebra</A><BR>\n" );
document.write( ": <I><SPAN STYLE=\"word-break: break-all;\"> An investment of $10,000 in the Emerging Country Debt Fund in 2001 was worth $24,780 in 2006. Use the formula to find the 5 year average annual return.  The formula is r=(S/P)^1/n-1. I am totally lost with this word problem. Could somebody help?Thank you in advance.  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #134477 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=134477\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> An investment of $10,000 in the Emerging Country Debt Fund in 2001 was worth $24,780 in 2006. Use the formula to find the 5 year average annual return. The formula is r=(S/P)^1/n-1. I am totally lost with this word problem.<BR>\n" );
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document.write( "P=initial investment = 10,000 ;  n=number of years = 5 ;  and the amount S <BR>\n" );
document.write( "that it is worth after n years = 24,780<BR>\n" );
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document.write( "r=(S/P)^[1/(n-1)]<BR>\n" );
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document.write( "Since  S=24,780 and P=10,000, you get\r<BR>\n" );
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document.write( "r = (24,780/10,000)^(1/(5-1)] = 1.2546 = 125%\r<BR>\n" );
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document.write( "Comment: The \"1\" might refer to the investment at the beginning of each year;<BR>\n" );
document.write( "then the 0.25 would be the interest rate.<BR>\n" );
document.write( "For example 10,000*(1+0.2546)^4 = $24,775<BR>\n" );
document.write( "This would be the value after 4 years if 10,000 was compounded yearly<BR>\n" );
document.write( "at 25%<BR>\n" );
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document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
document.write( "--------------------------------------------- <BR>\n" );
document.write( "Cheers,<BR>\n" );
document.write( "Stan H.<BR>\n" );
document.write( "  </SPAN>\n" );
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