Question

In 1803, the U.S. doubled in size with the Louisiana Purchase. That well-known real estate mogul Napoleon Bonaparte sold us 827,000 square miles (529,280,000 acres–there are 640 acres in a square mile). We paid $15 million. Assume that part of the US is worth an average of $6,500 per acre in 2019. What is the annual rate of return of this purchase for the U.S.?

Answer 1

Miles	827,000
Acre per mile	640
Total Acre	529,280,000
Purchase price	15,000,000
Selling price per acre	6,500
Total Selling price	=529280000*6500
Total Selling price	3,440,320,000,000
Time-(2019-1803)	216
3,440,320,000,000	15000000*(1+r)^216
(1+r)^216=	=3440320000000/15000000
(1+r)^216=	229,354.67
1+r=	229354.67^(1/216)
1+r=	1.05881
R=	0.05881
R=	5.881%