The value of an asset rose from £110,000 to £694,694 in 26 years.
Calculate the average annual percentage growth rate of the value of the asset assuming:
(a) growth in annual discrete 'jumps'
(b) continuous growth
Any help would be greatly appreciated.
There's a slight typo on CaptainBlack's part. 100000 in both cases should have been 110,000.
Equivalently,
(a)
P = £110,000
F = £694,694
j = nominal rate compounded annually [average annual percentage growth rate of the value of the asset assuming: (a) growth in annual discrete 'jumps']
m = 1 (as in annually)
t = 26 years
(b)
P = £110,000
F = £694,694
j = nominal rate compounded continuously [average annual percentage growth rate of the value of the asset assuming: (b) continuous growth]
t = 26 years