SOLUTION: An investor wants to analyze the earnings of a mutual fund account. Five years ago, the value of the account was $15,000 and it is now worth $18,750(no additional deposits were mad
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-> SOLUTION: An investor wants to analyze the earnings of a mutual fund account. Five years ago, the value of the account was $15,000 and it is now worth $18,750(no additional deposits were mad
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Question 976064: An investor wants to analyze the earnings of a mutual fund account. Five years ago, the value of the account was $15,000 and it is now worth $18,750(no additional deposits were made). If the account is compared to a bank account paying interest that is compounded continuously, what interest rate would the bank account have to pay to match the mutual fund accounts earnings? Answer by FrankM(1040) (Show Source):
You can put this solution on YOUR website! $18,750/$15000 = 1.25
To turn this into an annual rate, you need to take the 5th root or 1.25^.2 to get 1.0456 or an annual 4.56% return.
