Compute the total and annual return on the following investment Five years after paying $2900 for shares in a startup company, you sell the shares for $1900 (at a loss). The total return is (Do not round until the final answer Then round to the nearest tenth as needed) The annual return is (Do not round until the final answer. Then round to the nearest tenth as needed)

Question

contestada

Respuesta :

DeniceSandidge DeniceSandidge · Answer 1 · 2019-07-26T10:32:34+02:00

Answer:

total return is -34.4828 % and The annual return is - 8.1094 %

Step-by-step explanation:

given data

principal amount of share = $2900

selling amount pay = $1900

time period (t) = 5 years

to find out

total return and The annual return

solution

we know interest formula

amount = principal [tex](1 + r/100)^{t}[/tex]

put all these value amount principal, time n we get rate

1900 = 2900 [tex](1 + r/100)^{5}[/tex]

[tex](1 + r/100)^{5}[/tex] = 1900/2900

1 + r/100 = 0.9189

r = −8.1094

The annual return is - 8.1094 %

and total return is ((selling amount pay - principal amount ) / principal amount ) × 100

put these value and we get total return

total return = ((1900 - 2900) / 2900 ) × 100

total return = -0.344828 × 100

total return = -34.4828 %