Question

What is the rate of return when 40 shares of StockA, purchased for $15/share, are sold for $690? Thecommission on the sale is $6.Rate of Return = Give your answer as a percent rounded to thenearest tenth.

Answer 1

Answer:

$14.0\text{ \%}$

Explanation:

Here, we want to get the rate of return

We can calculate that by using the formula below:

$\text{Rate of return = }\frac{final\text{value - initial value}}{\text{ initial value}}\times\text{ 100\%}$

The initial value is as follows:

40 shares at $15 per share is:

$40\times15\text{ = \ 600}$

The final value is the value at which it was sold less the commission on sales

Mathematically, we have that as:

$690-6\text{ = \ 684}$

Thus, we have the rate of return as follows:

$\frac{684-600}{600}\times100\text{ \% = }\frac{84}{600}\times\text{ 100 \% = 14.0\%}$