Question

What are the returns on the following​ investments?  

Investment	Original Cost of Investment		Selling Price of Investment		Distributions Received		Percent Return
CD	​ $100		​$120		​$0		​?
Stock	​$40		​$30		​$1		​?
Bond	​$1,060		​$1,150		​$120		​?
Car	​$60,000		​$16,000		​$0		​?

Investment	Original Cost of Investment		Selling Price of Investment		Distributions Received		Percent Return
CD	​ $100		​$120		​$0		?​% ​(Round to two decimal​ places.)

Answer 1

The Percent Return on the Investment

The Percent Return on the Investment is calculated by using the following formula

The Percent Return on the Investment = [{(Selling Price of Investment - Original Cost of Investment) + Distributions Received} / Original Cost of Investment] x 100

Percent Return – CD

Percent Return – CD = [{($120 - $100) + $0} / $100] x 100

= [($20 + $0) / $100] x 100

= 20%

Percent Return – STOCK

Percent Return – STOCK = [{($30 - $40) + $1} / $40] x 100

= [(-$10 + $) / $40] x 100

= -22.50% (Negative Return)

Percent Return – BOND

Percent Return – BOND = [{($1,150 - $1,060) + $120} / $1,060] x 100

= [($90 + $120) / $1,060] x 100

= 19.81%

Percent Return – CAR

Percent Return – CAR = [{($16,000 - $60,000) + $0} / $60,000] x 100

= [(-$44,000 + $) / $60,000] x 100

= -73.33% (Negative Return)