If an asset declines in value from $5,000 to $4,100 over nine years, what is the mean annual growth rate in the asset’s value over these nin

Question

If an asset declines in value from $5,000 to $4,100 over nine years, what is the mean annual growth rate in the asset’s value over these nine years? Enter your answer as a percentage. If needed, round your answer to two decimal digits.

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Amaya 1 week 2022-01-08T12:35:30+00:00 1 Answer 0 views 0

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    2022-01-08T12:36:54+00:00

    Answer:

    -2.18%

    Step-by-step explanation:

    The mean annual growth rate of an investment over ‘n’ years is given by the following expression:

    r=(\frac{Present\ value}{Initial\ value}) ^{(1/n)}-1

    For a 9-year investment with present value of $4,100 and initial value of $5,000, mean annual growth rate is:

    r=(\frac{4,100}{5,000}) ^{(1/9)}-1\\r=-0.00218=-2.18\%

    The mean annual growth rate in the asset’s value is -2.18%

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