Final answer:
The rate of return on the sale of 20 shares of Stock A purchased for $30/share and sold for a total of $710 after a $6 commission is 17.33%.
Step-by-step explanation:
The question asks to calculate the rate of return from the sale of stocks. To find the rate of return, we need to consider the total cost of buying the stocks, which includes the purchase price and any commissions or fees, as well as the total revenue from selling the stocks after deducting any selling commissions or fees.
In this case, 20 shares of Stock A were purchased at $30 per share, so the total cost of purchasing the stocks is:
20 shares * $30/share = $600
Since there's also a $6 commission when selling the stocks, the total revenue from selling the stocks is $710 - $6 = $704.
To calculate the gain from the investment, we subtract the purchase cost from the selling revenue:
$704 (revenue) - $600 (cost) = $104 (gain)
The rate of return is determined by dividing the gain by the initial investment cost:
Rate of return = $104 gain / $600 initial cost = 0.1733 or 17.33%
Therefore, the rate of return is 17.33%.