Question

The Total Return on an investment is the relative change in the investment value:

Answer 1

Based on the problem, here is the given information:

Initial Value = $18,000

Ending Value after 8 years = $11, 000

To get the total return, let's use the given formula and plug in the information above.

`\begin{gathered} \text{Total }Return=\frac{EndingValue-InitialValue\text{ }}{\text{Initial Value}} \\ \text{Total }Return=(11,000-18,000)/(18,000) \end{gathered}`

Solve.

`\begin{gathered} \text{Total }Return=(-7,000)/(18,000)=-0.38888 \\ -0.38888*100=-38.888\approx-38.9 \end{gathered}`

Hence, the total return on Katy's investment is -38.9%.