Question

The Total Return on an investment is the relative change in the investment value:Total ReturnEnding Value-Initial ValueInitial ValueAna pays $16,000 for shares in a new company. She sells the shares 8 years later for $11,000. What was her total returnon this investment? Round your answer to the nearest tenth of a percent.The Total Return on Ana's investment is%

Answer 1

Answer:

She took a 45.5% loss on the investment

Explanation:

Parameters:

Initial value = $16,000

Final value = $11,000

Clearly, she has sold shares at a lower price to how she bought, so we should expect a loss.

$\begin{gathered} \frac{Final-Initial}{Final}\times100 \\ \\ =\frac{11000-16000}{11000}\times100 \\ \\ =\frac{-5000}{11000}\times100 \\ \\ =\frac{-5}{11}\times100 \\ \\ =-45.5 \end{gathered}$

She took a 45.5% loss on the investment