Question

Sarah sold her stock for $56.25 A share, which reflected a ROI of 7.7%. What was the original price of her stock?

Answer 1

Her's stock original price was approximately $52.23 a share.

ROI is found by dividing the gain from the investment minus the cost of the investment by the cost of the investment: ROI = $\frac{gain-cost}{cost}$
We know the ROI (7.7%, or 0.077) and the gain ($56.25).

0.077=$\frac{56.25-cost}{cost}$ ⇔ 0.077=$\frac{56.25}{cost}-\frac{cost}{cost}$ ⇔ 0.077=$\frac{56.25}{cost}-1$ ⇔ 1.077=$\frac{56.25}{cost}$ ⇔ cost=$\frac{56.25}{1.077}$ ⇔ cost≈52.23