"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?"
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.
