Final answer:
Callie's annual return on her investment is a 4.57% loss each year, calculated by dividing the total loss by the number of years she held the stock and then converting it to a percentage.
Step-by-step explanation:
Callie bought stock in a company for $3500 and sold it five years later for $2700. To calculate her annual return, we need to determine the total loss and then spread this loss out over the five years during which she held the stock. First, let's find the net loss: $3500 (purchase price) - $2700 (sale price) equals a net loss of $800. To find the annual return, this total loss should be divided by the number of years she held the stock.
Therefore, the annual return (as a loss) is calculated as follows: $800 net loss / 5 years = $160 loss per year. To express this annual return as a percentage, we divide the annual loss by the initial investment and then multiply by 100 to get the percentage: ($160 / $3500) × 100 = approximately 4.57% loss per year.
It's worth noting that this calculation does not include any transaction fees or potential dividends received during the holding period. Such factors could dramatically affect the actual realized return. However, based on the provided information, Callie's annual return on her investment would be a 4.57% loss each year over the five years.