The average rate is approximately 2%
The formula for calculating the average rate of return under continuous compounding is expressed as [tex]A=Pe^{rt[/tex]
Given the following parameters
[tex]P = \$50,000[/tex]
A = $175,222.57
t = 20 years
Substitute the given parameters into the formula to get the rat[tex]175,222.57 = 5000e^{20r}\\e^{20r}=\frac{175,222.57.}{5000}\\e^{20r}= 35.155514\\lne^{2r}=ln 35.155514\\2r = 3.5597\\r = 3.5597/2\\r =1.779 \%[/tex]
Hence the average rate is approximately 2%
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