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finite math

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Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.

  • finite math - ,

    let the rate be i

    220000(1+i)^5 = 270000
    (1+i)^5 = 1.2272727...
    take 5th root
    1+i = 1.0418..
    i = .0418 or appr 4.2% correct to the nearest tenth

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