An investor bought a stock 10 years ago for

An investor bought a stock 10 years ago for - (1 + x) 10 =...

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An investor bought a stock 10 years ago for $20 and sold it today for $35. What is the annual rate of growth (rate of return) on the investment? P o (1 + x) n = Pn 20 (1 + x) 10 = 35 35/20 = 1.75
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Unformatted text preview: (1 + x) 10 = 1.75 On the FV table, after 10 years the interest factor closest to 1.75 is 1.791 which is in the 6% column. So the answer is approximately 6%, but slightly below....
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This note was uploaded on 04/01/2012 for the course FINC 354 taught by Professor Gibbons-cobb during the Spring '12 term at Columbia College.

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