ne Value of Money KQuestion 4 (of 5) value 5.00 points Although appealing to mor

Question

ne Value of Money KQuestion 4 (of 5) value 5.00 points Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,401,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,557,500 What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g 32.16.) Annual rate of return Hints References eBook & Resources Hint#1 Hint #2 Check my work

Explanation / Answer

Price at 1999 = 12,557,500
Price at 2003 = 10,401,500
Price at 2003 = Price at 1999* ( 1+r)4
10,401,500/12,557,500 = (1+r)4
Rate (r) = (10,401,500/12,557,500)1/4 -1 = -0.04600 or -4.60%
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