Question

You invested $3,000 in the stock market one year ago. Today, the investment is valued at $3,780.

What return did you earn?

What return would you suffer next year for your investment to be valued at the original $3,000?

Answer #1

**Answer:**

Present Value (PV) = $3,000

Future Value (FV) = $3,780

Rate (r ) = ??

Time (n) = 1 year

Future Value = Present Value * (1 + r)^ n

$3,780 = $3,000 * (1 + r)^ 1

1.26 = (1 + r)

**0.26 = r
or r = 26%**

A return on 26% is earned on amount invested.

**After 1
year:**

Present Value (PV) = $3,780

Future Value (FV) = $3,000

Rate (r ) = ??

Time (n) = 1 year

Future Value = Present Value * (1 + r)^ n

$3,000 = $3,780 * (1 + r)^ 1

0.7937 = (1 + r)

**r = -0.2063
or r = -20.63%**

The investment would suffer a return on -20.63% to value the investment at $3,000 after 1 year.

One year ago, you invested
$2,700.00. Today, it is worth $3,500.00. What rate of interest did
you earn?
rev: 08_19_2016_QC_CS-57596
A.3.38 percent
B.2.47 percent
C.4.38 percent
D.14.82 percent
E.29.63 percent

SHOW ALL WORK
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of return did Bruce earn on his investment?

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invested $600. Today, these two investments are each worth $800.
Assume each account continues to earn its respective rate of
return. Which one of the following statements is correct concerning
these investments? Please show your
reasonings.
A) Three years from today, Trek's investment will be worth more
than Saul's.
B) One year ago, Saul's investment was worth less than Trek's
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C) Trek earns a higher rate of return than...

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