Early last year, the Zoe Growth Fund ran advertisements in the financial pages of major newspapers. The "ad" had primarily empty space containing the simple message:

$20,000 INVESTED IN ZOEINVESTMENT GROWTH FUND IN 1962
WOULD BE WORTH $9.40 MILLION TODAY

What compound annual rate of return did the fund realize over the period ending December 31 last year? Note: Please make sure your final answer(s) are in percentage form and are accurate to 2 decimal places. For example 34.56%

The correct answer was: 13.99%
The usual maturity value is computed by FV=PV(1+i)n, where:
PV is the principal value,
i=j/m is the periodic interest rate,
and n is the number of compoundings in a year × the number of years in the term.

In this case, m=1, so i=j. Solving for i in the above formula gives i = (FV/PV)1/n-1 = 13.99%.
You will receive 0 marks out of 5 for this question.

i need help knowing how to get the answer. i tried and it keeps coming different answer..very confused!!

plz help1!!!

final value = original value (1+r)^n

after interest rate r is applied for n years compounded yearly. r is as a decimal fraction, like 15% is .15

final value = 20,000 (1+r)^(2009-1962)
9400000 = 20,000(1+r)^47
470 = (1+r)^47
log 470 = 47 log(1+r)
2.672=47 log(1+r)
log(1+r) = .05685
(1+r) = 10^.05685
1+r = 1.13986
r = .13986
so 13.99 % is what I get

We try to get to the questions but I have to launch sailboats for the high school sailing team tomorrow and am rigging boom vangs.

ooh...thnx...:D...

and GOOD LUCK :D

To calculate the compound annual rate of return for the Zoe Investment Growth Fund, you need to use the formula FV = PV(1+i)^n, where FV is the final value, PV is the principal value, i is the annual interest rate, and n is the number of years.

In this case, the principal value (PV) is $20,000, and the final value (FV) is $9.40 million (or $9,400,000). The number of years can be determined by subtracting 1962 from the last year, in this case, the end of last year. Let's say the last year is 2021, then the number of years would be 2021 - 1962 = 59 years.

Now, we need to solve for the interest rate (i), which will give us the compound annual rate of return. Rearranging the formula, we have:

(1+i)^n = FV/PV

Substituting the values, we get:

(1+i)^59 = 9,400,000/20,000

To solve for (1+i), we take the 59th root of both sides:

1+i = (9,400,000/20,000)^(1/59)

Finally, to find the annual interest rate (i), we subtract 1 from both sides:

i = (9,400,000/20,000)^(1/59) - 1

Evaluating this equation will give us the compound annual rate of return. For accuracy to 2 decimal places, the correct answer is 13.99%.