The value of an investment rose 51% in 5 years. how do i figure out the annualized rate of return?

pppppppllllllllleeeeeeeeaaaaaaaassssssss... help!!

using logarithms!

There are two ways to solve the equation:

(1 + x)^5 = 1 + 0.51

ln(((1 + x)^5) = ln(1.51)
5*ln(1 + x) = ln(1.51)
ln(1 + x) = ln(1.51)/5
1+x = e^(ln(1.51)/5)
x = e^(ln(1.51)/5) - 1

or you can do it the easy way:
[(1 + x)^5]^0.2 = (1 + 0.51)^0.2
(1+x) = 1.51^(0.2)
x = 1.51^(0.2) -1

Let x=the annual rate of return.

(1+x)^5 = 1.51

Did you see how I got 1.51? If you had 1, a 51% increase would change it to 1.51.

Solve for X

Answer is 8.59%

You need to know about logarithms to solve the equation.

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