Question

Bowen purchases 80 shares of a stock for $31.96. in 6 years, he sells the stocks for $2,743.31. He calculates his ROI, shown below. Did he do this correctly? if not what error did he make?

(2,743.31 - 31.95(80)(6)) / (31.96(80)(6)) = -82.1% ROI

Answer 1

I don't know lol this is super cray cray

Answer 2

cost of 1 share = 31.96

cost of 80 shares = 2556.8

selling price of stocks = 2743.31

ROI =( net profit/ total investment ) * 100

ROI= ( ( 2743.31 - 2556.8) / 2556.8) * 100

ROI = (186.51/2556.8 ) * 100

ROI = 7.29 %

the mistake done by Bowen is that he has taken time (number of years = 6) in calculation which is not required and is resulting in the wrong answer