Question 48515: investment of $10,000 in 1997 in the Spartan Investment Grade Bond Fund grew to $14,309.61 in 2002 (www.fidelity.com). The average annual return r for an investment is given by the formula r=(s/p)^1/n -1 , where P is the initial investment and S is the amount it is worth after n years. Find the 5-year average annual return of this investment.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! investment of $10,000 in 1997 in the Spartan Investment Grade Bond Fund grew to $14,309.61 in 2002 (www.fidelity.com). The average annual return r for an investment is given by the formula r=(s/p)^1/n -1 , where P is the initial investment and S is the amount it is worth after n years. Find the 5-year average annual return of this investment.
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r = (14309.61/10000)^(1/5) - 1
r= 1.430961^(1/5) -1
r= 1.07429996 -1
r=0.07479996...
Average rate is approximately 7.47%
Cheers,
Stan H.
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