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24 June, 01:10

You bought A&B Co. stock 16 years ago for $10.00 a share. Today it is worth $125.00 a share. What annual rate of return have you averaged on this investment?

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  1. 24 June, 02:50
    0
    17.10%

    Explanation:

    The computation of the annual rate of return is shown below:

    Annual rate of return = (Future value) : (Present value) ^1: time period - 1

    where,

    Future value = $125

    Present value = $10

    And, the time period is 16 years ago

    Now placing these values

    So, the annual rate of return is

    = 1.17099 - 1

    = 17.10%

    Basically we applied the above formula so that the annual rate of return could come
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