A fund grows 3% from the beginning of 2010 to the end of 2010, grows 5% from the beginning of 2011 to the end of 2011, grows 2% from the beginning of 2012 to the end of 2012, and decreases 1% (i.e. “grows” −1%) from the beginning of 2013 to the end of 2013, and grows 1% from the beginning of 2014 to the end of 2014. Find the average growth rate (i.e. the “equivalent effective annual interest rates”) for the five-year period starting at the beginning of 2010 and ending at the end of 2014. Do the same for the period starting at the beginning of 2010 and ending at the end of 2012.
A fund grows 3% from the beginning of 2010 to the end of 2010, grows 5% from the beginning of 2011 to the end of 2011, grows 2% from the beginning of 2012 to the end of 2012, and decreases 1% (i.e. “grows” −1%) from the beginning of 2013 to the end of 2013, and grows 1% from the beginning of 2014 to the end of 2014. Find the average growth rate (i.e. the “equivalent effective annual interest rates”) for the five-year period starting at the beginning of 2010 and ending at the end of 2014. Do the same for the period starting at the beginning of 2010 and ending at the end of 2012.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A fund grows 3% from the beginning of 2010 to the end of 2010, grows 5% from the beginning of 2011 to the end of 2011, grows 2% from the beginning of 2012 to the end of 2012, and decreases 1% (i.e. “grows” −1%) from the beginning of 2013 to the end of 2013, and grows 1% from the beginning of 2014 to the end of 2014. Find the average growth rate (i.e. the “equivalent effective annual interest rates”) for the five-year period starting at the beginning of 2010 and ending at the end of 2014. Do the same for the period starting at the beginning of 2010 and ending at the end of 2012.
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