Although appealing to more refined tastes, art as a collectible has not always p

Question

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. Assume that in 2015, an auction house sold a statute at auction for a price of $10,542,500. Unfortunately for the previous owner, he had purchased it in 2010 at a price of $12,586,500. What was his annual rate of return on this sculpture? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Rate of return % Check my work

Explanation / Answer

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

10542500=12586500*(1+r/100)^5

(10542500/12586500)^(1/5)=(1+r/100)

(1+r/100)=0.965178692

r=(0.965178692-1)*100

which is equal to

=(3.48%)(Approx)(Negative).

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