Julian was given a gold coin originally purchased for $1 by his great-grandfather 50 years ago. Today the coin is worth $450. The rate of return realized on the sale of this coin is approximately equal to ________.
A) 7.5%
B) 13%
C) 9%
D) 18%

Question

Quizplus · Accepted Answer

The rate of return can be calculated using the formula for compound annual growth rate (CAGR), which is [(Final Value/Initial Value)^(1/Number of Years)] - 1. Plugging in the values: [(450/1)^(1/50)] - 1 ≈ 0.13 or 13%.

Julian Was Given a Gold Coin Originally Purchased for $1