you invest $5,000 in stocks, and one year later they are worth $5,600. what is your roi?\no a 10%\no b…

you invest $5,000 in stocks, and one year later they are worth $5,600. what is your roi?\no a 10%\no b 12%\no c 15%\no d 8%\nquestion 7 (1 point)\napy will always be equal to apr if interest is compounded.\no true\no false

you invest $5,000 in stocks, and one year later they are worth $5,600. what is your roi?\no a 10%\no b 12%\no c 15%\no d 8%\nquestion 7 (1 point)\napy will always be equal to apr if interest is compounded.\no true\no false

Answer

Explanation:

Step1: Calculate profit

Profit = Final value - Initial value = $5600 - 5000=600$

Step2: Calculate ROI

ROI = $\frac{Profit}{Initial\ value}\times100%=\frac{600}{5000}\times 100% = 12%$

For the second - question: APY (Annual Percentage Yield) is the effective annual rate of return taking into account the effect of compounding. APR (Annual Percentage Rate) is the simple - interest rate. When interest is compounded, APY > APR. For example, if the APR is $r$ and it is compounded $n$ times a year, $APY=(1 + \frac{r}{n})^n-1$. Only when $n = 1$ (no compounding, simple interest) will APY = APR.

Answer:

  1. B. 12%
  2. False