Question

"suppose that you invest $1,000.00 in stock, which is called your financial asset. one year later, your investment yields $1245.00. what is the rate of return of your investment?"

Answer 1

Hey there, Jessebear644!

Your return is $245 since you initially invested $1000 and got those $1000 back plus $245
Also, the rate shall be equal to +124.5% per year or 1.245 in decimal.
"How did you find that percentage?"
You just divide the new price, or new value, by the old price, or old value.
So, $1245 / $1000 = 1.245
We multiply that decimal by 100 to find the percentage.
I hope this helps.

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