Question

The Total Return on an investment is the relative change in the investment value:Total ReturnEnding Value-Initial ValueInitial ValueRosa pays $14,500 for shares in a new company. She sells the shares 8 years later for $12,000. Whatwas her total return on this investment? Round your answer to the nearest tenth of a percent.The Total Return on Rosa's investment is 13.8 x %

Answer 1

To find:

The total return on the investment.

Solution:

It is given that the formula of total return is:

`\text{ Total return }=\frac{\text{ Ending value }-\text{ Initial value}}{\text{ Initial value}}`

The initial value is 14500 and the ending value is 12000. So, the total return is:

`\begin{gathered} \text{ Total return}=(12000-14500)/(12000) \\ =(-2500)/(12000) \\ =-0.2083 \end{gathered}`

If we convert it into percent, then the answer is:

`0.2083*100=20.83`

So, the answer to the nearest