To calculate the rate of return (annualized return), we use the formula for the Compound Annual Growth Rate (CAGR):

$\text{CAGR} = \left( \frac{A}{P} \right)^{\frac{1}{n}} - 1$

Where:

• $A$ is the final amount ($644,231 in 2025)
• $P$ is the initial amount ($179,000 in 2006)
• $n$ is the number of years between 2006 and 2025, which is $2025 - 2006 = 19$ years.

Now, plugging the values into the formula:

$\text{CAGR} = \left( \frac{644231}{179000} \right)^{\frac{1}{19}} - 1$

First, calculate the ratio:

$\frac{644231}{179000} \approx 3.595$

Now calculate the 19th root:

$\text{CAGR} = (3.595)^{\frac{1}{19}} - 1 \approx 1.0705 - 1 = 0.0705$

So the annual rate of return is approximately 7.05%.

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Would you like further details on how this is calculated, or do you have any questions?

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Here are some related questions you might find useful:

1. How do you calculate the future value of an investment with a known rate of return?
2. What other methods can be used to calculate the return on an investment?
3. How does inflation affect the real rate of return on investments?
4. How do different compounding frequencies impact the return on an investment?
5. What is the difference between nominal and real rate of return?

Tip: The Compound Annual Growth Rate (CAGR) gives you a smooth average rate of return over time, assuming the growth happens at a steady rate.