Answer:
annual compounded return = 4.73 %
so correct option is D) 4.73%
Explanation:
given data
present value = $25
future value = $100
time = 30 year
to find out
annual compounded return
solution
we get here annual compounded return that is express as
annual compounded return = [tex](\frac{FV}{PR} )^{\frac{1}{t}} - 1[/tex] ............1
here t is time period and FV is future value and PV is present value
so put here all value in equation 1 we get
annual compounded return = [tex](\frac{100}{25} )^{\frac{1}{30}} - 1[/tex]
annual compounded return = 0.047294
annual compounded return = 4.73 %
so correct option is D) 4.73%
