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November 22nd, 2008, 10:32 AM   #1
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need help w/present and future values problem

I have searched the net for an online calculator to figure out this problem. Your expertise would help!

An investment of 3 million dollars is expected to become 6 million dollars in ten years. What is the expected rate of return?

Thanks. -John in San Antonio
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November 22nd, 2008, 12:39 PM   #2
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Re: need help w/present and future values problem

I use Google as a calculator for these kinds of problems. Just type in
(6000000/3000000)^(1/10)
and you'll get 1 + rate of return.
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November 22nd, 2008, 01:25 PM   #3
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Re: need help w/present and future values problem

Quote:
Originally Posted by CRGreathouse
I use Google as a calculator for these kinds of problems. Just type in
(6000000/3000000)^(1/10)
and you'll get 1 + rate of return.
It pays to simplify first, so you don't have to type as much. What you want is 2^(1/10).
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November 22nd, 2008, 02:08 PM   #4
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Re: need help w/present and future values problem

If I was putting it into Google for myself I'd use 2^.1, which is even shorter. But for pedagogical purposes I left everything unsimplified.
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