Answers
Ending value = beginning value * (1 + r)n,
where ending value = value in 2014
beginning value = value in 1925. This is $1 for all the investments.
r = geometric average annual return.
n = number of years from 1925 to 2014, which is 89 years.
(a)
$27,419.32 = $1 * (1 + r)89
r = ($27,419.32 / $1)1/89 - 1
r = 12.17%.
(b)
$5,316.85 = $1 * (1 + r)89
r = ($5,316.85 / $1)1/89 - 1
r = 10.12%.
(c)
$135.18 = $1 * (1 + r)89
r = ($135.18 / $1)1/89 - 1
r = 5.67%.
(d)
$20.58 = $1 * (1 + r)89
r = ($20.58 / $1)1/89 - 1
r = 3.46%.
(e)
$13.10 = $1 * (1 + r)89
r = ($13.10 / $1)1/89 - 1
r = 2.93%.
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