Chapter 10.3, Problem 26MS

Fiddling for dollars. As presented in the section on page 796, if you invest P dollars in a savings account paying r percent interest compunded t times per year, the amount of money you have at the end of y years is equal to $P\times {\left(1+\frac{r}{100t}\right)}^{ty}$ dollars. If the interest is compounded once a year, then $t=1$ and the formula becomes $P\times {\left(1+\frac{r}{100t}\right)}^{ty}$. Suppose you buy a violin for $\$5000$ and sell it four years later for $\$8000$. What was the average annual rate of return on this investment?