Question

What is the rate of return when 25 shares of Stock A, purchased for $30/share, are sold for $825? The commission on the sale is $6. Rate of Return = [?] %

Answer 1

The rate of return after selling 25 shares of Stock A, bought at $30 each and sold for $825 with a $6 commission, is approximately 9.2%.

Step-by-step explanation:

Calculating the Rate of Return on a Stock Investment

The question asks for the rate of return of selling 25 shares of Stock A purchased at $30 per share and sold for a total of $825, with a $6 commission on the sale. To calculate the rate of return, we first need to find the initial investment amount and the net profit from the sale.

Initial Investment = 25 shares x $30/share = $750

Gross Sale Proceeds = $825
Commission on Sale = $6
Net Sale Proceeds = Gross Sale Proceeds - Commission = $825 - $6 = $819

Next, we find the net profit:

Net Profit = Net Sale Proceeds - Initial Investment = $819 - $750 = $69

Finally, we calculate the rate of return using the formula:

Rate of Return = (Net Profit / Initial Investment) x 100 = ($69 / $750) x 100 ≈ 9.2%

Answer 2

Given:

The rate of return when 25 shares of Stock

A. purchased for $30/share, are sold for $825. The commission on the sale is $6.

Required:

What is the rate of return?

Step-by-step explanation:

First step is to find the shares of stock price:

Shares of stock price=25 shares×$30/share

Shares of stock price= $750

Second step is to calculate the total sold price:

Total sold price= $825+$6

Total sold price= $831

Third step is to calculate the Rate of return:

`\begin{gathered} \text{ Rate if return }=(831-750)/(750)*100 \\ \text{ Rate if return }=(81)/(750)*100 \\ \text{ Rate of return }=10.8\% \end{gathered}`

Answer:

Rate of return is 10.8%