Posted by **Robert** on Monday, October 4, 2010 at 1:10pm.

My son informed me that a comic book I purchased for 10 cents in 1948 is worth $55 today. What has been the average annual compound rate of return on that valuable asset?

- investing -
**Henry**, Monday, October 4, 2010 at 9:21pm
Pt = Po * (r + 1)^n.

Pt = principal after time t (62 yrs.),

Po = initial investment,

r = rate per compounding period expressed as a decimal.

n = the number of compounding periods.

55 = 0.10 * (r + 1)^62,

Divide both sides by 0.10 and Solve for r:

550 = (r + 1)^62

Take the log of both sides:

log550 = 62*log(r + 1),

divide both sides by 62:

log550 / 62 = log(r + 1),

0.04420 = log(r + 1),

10^0.04420 = r + 1,

1.107132 = r + 1,

0.107132 = r, or

r = 0.107132 = 10.7132 % = annual

percentage rate ( APR ) compounded

annually.

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