Question

What is the rate of return when 40 shares of StockA, purchased for $15/share, are sold for $690? Thecommission on the sale is $6.Rate of Return = Give your answer as a percent rounded to thenearest tenth.

Answer 1

14%

Explanation:

You want to know the rate of return on 40 shares of stock bought at $15 each and sold at $690, with a commission on the sale of $6.

Return

The proceeds from the sale were ...

selling price - commission = $690 -6 = $684

The amount of return is the difference from the purchase price:

$684 -40($15) = $685 -600 = $84

Percent return

The return expressed as a percent of the investment is ...

(84/600)×100% = 14%

The rate of return on the stock was 14%.