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    mcubed18's Avatar
    mcubed18 Posts: 3, Reputation: 1
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    #1

    Mar 29, 2010, 02:25 PM
    How to find the return of a purchase after selling it
    A painting was bought for 3.52 million in 1989 and sold for 1.95 million in 1995. What is the return? Thank you for any help
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Mar 30, 2010, 05:14 AM
    The annual return is given by...



    ... where S, P, and n denote the sales proceeds, the original purchase amount, and the number of years the asset was held.

    Obviously in this case the return was < 0. To twist an old expression, I don't know art, but I know what a negative return looks like ;)
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