SOLUTION: An investment of $10000 in 1997 in the Spartan Investment Grade Bond Fund grew to $14309.61 in 2002. Use the formula R=(S/P)^1/n - 1, to find the 5 year average annual return.

Algebra ->  Exponents -> SOLUTION: An investment of $10000 in 1997 in the Spartan Investment Grade Bond Fund grew to $14309.61 in 2002. Use the formula R=(S/P)^1/n - 1, to find the 5 year average annual return.      Log On


   

Question 149913: An investment of $10000 in 1997 in the Spartan Investment Grade Bond Fund grew to $14309.61 in 2002. Use the formula R=(S/P)^1/n - 1, to find the 5 year average annual return.
Answer by vleith(2983) About Me  (Show Source):
You can put this solution on YOUR website!
See here --> http://qrc.depaul.edu/StudyGuide2007/Notes/Savings%20Accounts/Compound%20Interest.htm
You are given r=%28%28A%2FP%29%5E%281%2Fn%29%29+-+1
A=14309.61
P=10000
n=5
So plug in and solve for r
r=%28%2814309.91%2F10000%29%5E%281%2F5%29%29+-+1
r=%28%281.430991%29%5E%281%2F5%29%29+-+1
r=%28%281.430991%29%5E%281%2F5%29%29+-+1
r=1.07+-+1
r=0.07
So r is 7%