Math Problem Statement

Juan invested $25,000 in a mutual fund 5 years ago. Today his investment is worth $35,393. Find the effective annual rate of return on his investment over the 5-yr period. (Round your answer to two decimal places.)

Solution

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Exponential Growth

Formulas

A = P(1 + r)^t
r = (A / P)^(1/t) - 1

Theorems

Compound Interest Formula

Suitable Grade Level

Grades 10-12