Given:
An investor purchased 100 shares of stock in a company for $12 per share. One year later, the investor sold all the shares for $1,300.
Required:
What is the investor's rate of return?
Explanation:
We know that
[tex]\begin{gathered} \text{ Initial price}=100\times12 \\ \text{ =1200 } \end{gathered}[/tex][tex]\text{ Final price}=1300\text{ }[/tex]Now, rate of return
[tex]R=\frac{Final\text{ value-Initial value}}{Initial\text{ value}}[/tex]So, percentage is
[tex]\begin{gathered} R=\frac{1300-1200}{1200}\times100 \\ R=\frac{100}{1200}\times100 \\ R=8.33 \end{gathered}[/tex]Answer:
Hence, above is the return of return.
