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Paul bought some gold coins 12 years ago for $4000. He sold them today for $3726....

Paul bought some gold coins 12 years ago for $4000. He sold them today for $3726. What is Paul’s rate of return?

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Answer #1

Given information- Purchase price of gold coins 12 years ago= $4000

sale price today= $3726

Find- the rate of return?

The rate of return on any investment is calculated by finding the net cash inflows divided by the initial investment. It is usually calculated to know what value the investment has added to our initial investment.

Rate of return= sale price - purchase price/ purchase price x 100

=$3726 - $4000/ $4000 x 100

= -6.85%

The rate of return on the above investment is 6.85%

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