$1(1 g) 8 2 (1 g) 8 2 Using the interest table for the future value of $1, the growth rate is approximately 9 percent (PV 1 FV 2 N 8 PMT 0 I 9 05 ) The problem may also be solved as follows (1 g) 8 2 g 2 125 1 9 05 An investor expects the price of a stock to double after eight years What is the expected annual rate of growth a 8 95 b 9 00 c 10 25 d 9 05 e 9 77

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Question: $1(1 + g) 8 = 2 (1 + g) 8 = 2 Using the interest table for the future value of $1, the growth rate

$1(1 + g) ⁸ = 2 (1 + g) ⁸ = 2 Using the interest table for the future value of $1, the growth rate is approximately 9 percent. (PV = -1; FV = 2; N = 8; PMT = 0; I = ? = 9.05.) The problem may also be solved as follows: (1 + g) ⁸ = 2 g = 2 ¹²⁵ - 1 = 9.05%An investor expects the price of a stock to double after eight years. What is the expected annual rate of growth?

	a.	8.95%
	b.	9.00%
	c.	10.25%
	d.	9.05%
	e.	9.77%

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