Question

You sell a stock for $50.00 that was held for 10 years. You earned a return of 8%. What was the original cost of the stock?

Answer 1

Original cost of the stock = $23.16

Step-by-step explanation:

Original cost of the stock = Selling price of stock / ( 1 + r )^n

Original cost of the stock = $50 / (1+8%)^10

Original cost of the stock = $50 / (1.08)^10

Original cost of the stock = $23.16