Question

Calculate the ROI dollar amount and percentage for these example investments. a. You invest $50 in a government bond that says you can redeem it a year later for $54. Use the instructions in Lesson 3 to calculate the ROI dollar amount and percentage. (2.0 points) TIP: Subtract the initial investment from the total return to get the ROI dollar amount. Then divide the ROI dollar amount by the initial investment, and multiply that number by 100 to get the percentage. b. You invest $100 in stocks and sell them one year later for $115. Use the instructions in Lesson 3 to calculate the ROI dollar amount and percentage. (2.0 points) TIP: Subtract the initial investment from the total return to get the ROI dollar amount. Then divide the ROI dollar amount by the initial investment, and multiply that number by 100 to get the percentage.

Answer 1

Answer:

a. ROI Dollar Amount $4; ROI percentage = 8%.

b.ROI Dollar Amount $15; ROI percentage = 15%.

a. We have:

Initial investment            $50

Amount at year end       $54

ROI Dollar Amount         $54 -50 = 4$

ROI Percentage              $\mathbf{ \frac{4}{50} * 100 = 8%}$

b.

Initial investment            $100

Amount at year end       $115

ROI Dollar Amount         $115 -100 = 15$

ROI Percentage              $\mathbf{ \frac{15}{100} * 100 = 15%}$

Answer 2

ROI is the Return on Investment. It is the performance measurement tool that helps to determine the return earned on money invested.

The ROI of the individual case is:

a. In amount $4 and in percentage, it is 80%

b. In amount it is $15 and in percentage, it is 15%

Computation of ROI:

The formula of ROI:

$\begin{aligned}\text{ROI}&=\frac{\text{Initial Investment}-\text{Total Return}}{\text{Initial Investment}} \end{aligned}$

a.

Given:

Initial investment =$50

Total return= $54

$\begin{aligned}\text{ROI}&=\frac{\text{Initial Investment}-\text{Total Return}}{\text{Initial Investment}} \\&=\frac{\ 50-\ 54}{\ 50}\times100\\&=80\%\end{aligned}$

b.

Given:

Initial investment =$100

Total return= $115

$\begin{aligned}\text{ROI}&=\frac{\text{Initial Investment}-\text{Total Return}}{\text{Initial Investment}} \\&=\frac{\ 100-\ 115}{\ 100}\times100\\&=15\%\end{aligned}$

To know more about the Return on investment, refer to the link:

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