- #1
beaf123
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Hey guys. I have a very easy math problem which I can't seem to solve. Its been a while since I have had any math. A painting is bought in
1963 for 92,000 pounds, was sold in 2012 10.1 million pounds.
Calculate the effective annual return rate and the annual percentage return rate of this investment.
I found a formula and this is what I did. This is the effective annual interest rate. Does anyone know the difference between this and the annual percentage reurn rate?
The effective annual interest rate:
= 92000((1+ X/49) ^49 – 1) = 10 100 000 { /92000
(1+X/49)^49 = 111 } ln of both sides and properties of logs
49ln(1+X/49) = ln111
1n(1+X/49)=ln(111)/49
1+X/49 = e^0.096
X = (e^0.096)*49 –49 = 4.937%
Annual interest rate = 4,937 %
1963 for 92,000 pounds, was sold in 2012 10.1 million pounds.
Calculate the effective annual return rate and the annual percentage return rate of this investment.
I found a formula and this is what I did. This is the effective annual interest rate. Does anyone know the difference between this and the annual percentage reurn rate?
The effective annual interest rate:
= 92000((1+ X/49) ^49 – 1) = 10 100 000 { /92000
(1+X/49)^49 = 111 } ln of both sides and properties of logs
49ln(1+X/49) = ln111
1n(1+X/49)=ln(111)/49
1+X/49 = e^0.096
X = (e^0.096)*49 –49 = 4.937%
Annual interest rate = 4,937 %