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Tatiana [17]
3 years ago
15

George invested $1,000 in large U.S. stocks at the beginning of 2012. This investment earned 16.35 percent in 2012, 31.50 percen

t in 2013, 13.85 percent in 2014, and 2.90 percent in 2015. What return did he earn in the average year during the 2012–2015 period?
Business
1 answer:
saul85 [17]3 years ago
3 0

Answer:

$161.50

Explanation:

Amount Invested = $1,000

Number of years = 4

Return for each year = Amount Invested × Interest rate

                                  = $1,000 × Interest rate

For 2012:

Interest rate = 16.35% = 0.1635

Therefore,

Return for 2012 = $1,000 × 0.1635

                          = $163.50  

For 2013:

Interest rate = 31.50% = 0.3150

Therefore,

Return for 2013 = $1,000 × 0.3150

                          = $315.00  

For 2014:

Interest rate = 13.85% = 0.1385

Therefore,

Return for 2014 = $1,000 × 0.1385

                          = $138.50  

For 2015:

Interest rate = 2.90% = 0.029

Therefore,

Return for 2015 = $1,000 × 0.029

                          = $29.00  

Average for 2012-2015

To get this, we add the returns for the 4 years, i.e. 2012-2015, and then divide it by the number of years which 4 as follows:

Average for 2012-2015 = ($163.50  + $315.00 + $138.50 + $29.00) ÷ 4

                                       = $646.00  ÷ 4

                                       = $161.50

Therefore, George's average return for the period is $161.50.

I wish you all the best.

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