Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2021, an auction house sold a painting at auction for a price of $1,060,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,640,000. What was his annual rate of return on this painting? (A negative value should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2021, an auction house sold a painting at auction for a price of $1,060,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,640,000. What was his annual rate of return on this painting? (A negative value should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 2RP

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Problem 4-8 Calculating Rates of Return

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2021, an auction house sold a painting at auction for a price of $1,060,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,640,000. What was his annual rate of return on this painting? (A negative value should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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