Jeremy purchased 100 shares of FB for $19 per share in September 2012 and sold them 3 years later at $91 per share. At what annual rate did the value of his investment grow?
A) about 95%
B) about 48%
C) about 69%
D) about 12%

Question

Quizplus · Accepted Answer

The annual growth rate can be calculated using the formula for compound annual growth rate (CAGR), which is $CAGR = \left(\frac{FV}{PV}\right)^{\frac{1}{n}} - 1$, where FV is the future value, PV is the present value, and n is the number of years. Plugging in the values: $CAGR = \left(\frac{91}{19}\right)^{\frac{1}{3}} - 1 \approx 0.69$ or 69%.

Jeremy Purchased 100 Shares of FB for $19 Per Share