Question

The Total Return on an investment is the relative change in the investment value:Total ReturnEnding Value-Initial ValueInitial ValueRosa pays $14,500 for shares in a new company. She sells the shares 8 years later for $12,000. Whatwas her total return on this investment? Round your answer to the nearest tenth of a percent.The Total Return on Rosa's investment is 13.8 x %

Answer 1

To find:

The total return on the investment.

Solution:

It is given that the formula of total return is:

$\text{ Total return }=\frac{\text{ Ending value }-\text{ Initial value}}{\text{ Initial value}}$

The initial value is 14500 and the ending value is 12000. So, the total return is:

$\begin{gathered} \text{ Total return}=\frac{12000-14500}{12000} \\ =\frac{-2500}{12000} \\ =-0.2083 \end{gathered}$

If we convert it into percent, then the answer is:

$0.2083\times100=20.83$

So, the answer to the nearest