Question

Compute the total and annual return on the following investment Two years after paying 53500 for shares in a startup company you set the shares for $3300 (at a loss) The total return is Do not round until the final answer. Then found to the nearest tonth as needed

Answer 1

Answer:

-46.91%

Step-by-step explanation:

Given:

Cost of buying the shares = $53,500

Selling cost of the shares = $3,300

Number of years = 2

Since the selling cost is less than the buying cost, therefore the statement for the loss can be verified

Now,

The loss = Selling cost - cost of buying = $3,300 - $53,500 = - $50,200

thus, the loss per year = $\frac{\textup{50,200}}{\textup{2}}$ = -$25100

Hence,

Rate of return = $\frac{\textup{Loss per year}}{\textup{Cost of buying}}\times100$

or

Rate of return = $\frac{\textup{-25100}}{\textup{53,500}}\times100$

or

Rate of return = -46.91%