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If an asset declines in value from $5000 to $3500 over 9 years, what is the mean annual growth rate in the asset’s value over these 9 years?.

Sagot :

ajeigbeibraheem

The mean annual growth rate in the asset's value over 9 years is -3.89%

What is the mean annual growth rate?

The mean annual growth rate is the average rate at which the value of an investment, asset, or cash flow has increased over time.

It is calculated by using the formula:

[tex]\mathbf{=(\dfrac{F}{P})^{1/n} - 1}[/tex]

where;

  • F = future value
  • P = present value
  • I = interest rate
  • n = number of periods.

[tex]\mathbf{=(\dfrac{3500}{5000})^{1/9} - 1}[/tex]

= -0.3885 × 100%

= -3.89%

Learn more about mean annual growth rate here:

https://brainly.com/question/20115298

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