Question

Jill pays $15,500 for shares in a new company. She sells the shares 8 years later for $12,500. What was her total return on this investment? Round your answer to the nearest tenth of a percent.The Total Return on Jill's investment is %____

Answer 1

Step-by-step explanation:

The formula for getting the ROI or Return of Investment is:

`ROI=\frac{finalvalue-initialvalue}{initial\text{ value}}*100`

In the problem, the initial value is $15,500 while the final value is $12,500.

Plugging these data into the formula above, we get:

`TotalReturn=(12,500-15,500)/(15,500)*100`

Then, simplify.

`\begin{gathered} TotalReturn=(-3,000)/(15,500)*100 \\ TotalReturn=-0.193548*100 \\ TotalReturn=-19.3548 \\ TotalReturn\approx-19.4\% \end{gathered}`

Answer:

The total return on Jill's investment is -19.4%.