Question

Suppose that in the at the beginning of the year 1920 you invested $500,000 in a...

Suppose that in the at the beginning of the year 1920 you invested $500,000 in a hedge fund that is was now worth (80 years later) $48,852,026.00. Compute the monthly growth rate of your investment expressed as a percent rounded to two decimals

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Answer #1

Amount Invested in Year 1920 = $500,000

Future Value it grow to after 80 years = $48,852,026.00

Calculating the Monthly Growth rate of your Investment:-

Where,

r = Monthly Interest rate

n= no of periods = 80 years*12 = 960

Taking 960-root on both sides,

1.004784 = (1+r)

r = 0.48%

So, the monthly growth rate of your investment is 0.48%

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