What annual rate of return is earned on a $14,000 investment when itgrows to $22.000 in five years?O9.76 percent9.56 percentO 9.11 percentO9.46 percent

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Answer

9.46%

Step-by-step explanation

Annual rate of return formula

[tex]\text{ Annual rate of return }=[(\frac{ending\text{ value}}{initial\text{ value}})^{\frac{1}{No\text{ of years}}}-1]\times100[/tex]

In this case, the ending value is $22,000, the initial value is $14,000, and the number of years is 5. Substituting these values into the formula:

[tex]\begin{gathered} \text{ Annual rate of return }={}\lbrack(\frac{22,000}{14,000})^{\frac{1}{5}}-1]\times100 \\ \text{Annual rate of return }=9.46\text{ \%} \end{gathered}[/tex]