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
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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
