Julian was given a gold coin originally purchased for $1 by his great grandfather 50 years ago.Today the coin worth $450. The rate of return realized on the sale of this coin is approximatelyequal to
A) 13%.
B) 50%.
C) 7.5%.
D) cannot be determined with given information

Question

Quizplus · Accepted Answer

The rate of return can be calculated using the formula for compound annual growth rate (CAGR): CAGR = (Ending Value/Beginning Value)^(1/Number of Years) - 1. Plugging in the values: CAGR = ($450/$1)^(1/50) - 1 ≈ 0.13 or 13%.

Julian Was Given a Gold Coin Originally Purchased for $1