Fifteen years ago, your parents opened an investment account with an initial deposit of $5,000. Today, that account is worth $37,961.66. What average annual rate of return did they earn on their investment?
FV = PV[1 + R]^N
37,961.66 = 5,000[1 + R]^15 divide both sides by 5,000
7.592332 = [1 + R]^15 take the 15th root of both sides
1 + R =7.592332^(1/15)
1 + R =1.1447 subtract 1 from both sides
R =1.1447 - 1 x 100
R = 14.47%
