part ii - rate of return\ndirections: using the rate of return equation, determine the rate of return on the…

part ii - rate of return\ndirections: using the rate of return equation, determine the rate of return on the following problems. you must show how you calculated you answer.\n(return(current price)-capital(investment amount)/capital(investment amount) * 100 = rate of return\n8. if you buy a share of stock for $25 and turn around the following week and sell it for 30, what is the rate of return.\n9. you initially invest $100. one year later, your investment grows to $200 in value. the year after that, the investment drops back to $100. the rate of return after the first year is\n10. lets say you invest $100 in stock, which is called your capital. one year later, your investment yields $110. what is the rate of return of your investment?

part ii - rate of return\ndirections: using the rate of return equation, determine the rate of return on the following problems. you must show how you calculated you answer.\n(return(current price)-capital(investment amount)/capital(investment amount) * 100 = rate of return\n8. if you buy a share of stock for $25 and turn around the following week and sell it for 30, what is the rate of return.\n9. you initially invest $100. one year later, your investment grows to $200 in value. the year after that, the investment drops back to $100. the rate of return after the first year is\n10. lets say you invest $100 in stock, which is called your capital. one year later, your investment yields $110. what is the rate of return of your investment?

Answer

Explanation:

Step1: Identify the formula

The formula for rate of return is $\text{Rate of Return}=\frac{\text{Return(Current Price)}-\text{Capital(Investment Amount)}}{\text{Capital(Investment Amount)}}\times100$.

Step2: Solve problem 8

The investment amount (capital) is $25$ and the current - price (return) is $30$. $\text{Rate of Return}=\frac{30 - 25}{25}\times100=\frac{5}{25}\times100$. $\frac{5}{25}\times100 = 20%$.

Step3: Solve problem 9

The initial investment (capital) is $100$ and the value after the first year (return) is $200$. $\text{Rate of Return}=\frac{200 - 100}{100}\times100=\frac{100}{100}\times100 = 100%$.

Step4: Solve problem 10

The initial investment (capital) is $100$ and the value after one year (return) is $110$. $\text{Rate of Return}=\frac{110 - 100}{100}\times100=\frac{10}{100}\times100=10%$.

Answer:

  1. $20%$
  2. $100%$
  3. $10%$