Question

Compute the total and annual return on the following investment.

Two years after paying $3400 for shares in a startup company, you sell the shares for $2100 (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.)

Answer #1

**SOLUTION:**

From given data,

**Compute the
total and annual return on the following investment.Two years after
paying $3400 for shares in a startup company, you sell the shares
for $2100 (at a loss).**

Let us consider,

P = $ 3400

A = $ 2100

Y = 2

**The total
return is**

The total return is = (A - P) / P

The total return is = (2100 - 3400) / 3400

The total return is = -1300 / 3400

The total return is = -0.3823

The total return is = -38.23 %

**The annual
return is**

Annual return = (A / P)^{(1/Y)} - 1

Annual return = (2100 / 3400)^{(1/2)} - 1

Annual return = (0.617647)^{(1/2)} - 1

Annual return = 0.7859052 - 1

Annual return = -0.2140

Annual return = - 21.40 %

Compute the total and annual return on the following
investment.
Three years after paying $3300
for shares in a startup company, you sell the shares for $2600
(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.)

Compute the total and annual return on the following investment.
Five years after paying $3800 for shares in a startup company, you
sell the shares for $1700 (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.)

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Total Return: 70.00%
Annual Return: 11.29%
Total Return: 66.67%
Annual Return: 10.76%
Total Return: 60.00%
Annual Return: 9.68%
Total Return: 56.67%
Annual Return: 9.14%

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