Question

Sarah sold her stock for $56.25 A share, which reflected a ROI of 7.7%. What was the original price of her stock?

Answer 1

Her's stock original price was approximately $52.23 a share.

ROI is found by dividing the gain from the investment minus the cost of the investment by the cost of the investment: ROI =
`(gain-cost)/(cost)`
We know the ROI (7.7%, or 0.077) and the gain ($56.25).

0.077=
`(56.25-cost)/(cost)` ⇔ 0.077=
`(56.25)/(cost)-(cost)/(cost)` ⇔ 0.077=
`(56.25)/(cost)-1` ⇔ 1.077=
`(56.25)/(cost)` ⇔ cost=
`(56.25)/(1.077)` ⇔ cost≈52.23