Although appealing to more refined tastes, art as a collectible has not always p

Question

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,331,500. Unfortunately for the previous owner, he had purchased it in 2000 at a price of $12,417,500. What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.

Explanation / Answer

Particulars Amount($) Purchased price 1,24,17,500 Sell Price 1,03,31,500 Net Loss -20,86,000 Annual rate of return by using simple interest -5.60% ((-2086000/12417500)/3)*100 Annual rate of interest by using Compound rate Cube root of (-2086000/12417500) (Cube root of -0.16799)*100 -0.552*100 -5.52%

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