You bought A&B Co. stock 16 years ago for $10.00 a share. Today it is worth $125.00 a share. What annual rate of return have you averaged on this investment?

17.10%

Explanation:

The computation of the annual rate of return is shown below:

Annual rate of return = (Future value) ÷ (Present value)^1÷ time period - 1

where,

Future value = $125

Present value = $10

And, the time period is 16 years ago

Now placing these values

So, the annual rate of return is

= 1.17099 - 1

= 17.10%

Basically we applied the above formula so that the annual rate of return could come

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