Average annual rate of return = 22.3%
Explanation:
The average annual rate of return can be computed using the Future value of a a single sum
FV = PV × (1+r)^n
FV = value of investment, PV = cost of investment, r- rate of return, n- number of years
900×(1+r)^8 = 4500
divide both sides by 900
1+r = 4,500/900
1+r = (4.500/900)^(1/8)
r = (4.500/900)^(-10) - 1
r= 0.2228
r =0.2228 × 100
Average annual rate of return = 22.3%