Question

Nicholas initially invested $2,400 in a technology company. The company recently paid annual dividends of $22 and his year-end investment value was $2,000. What was the rate of return on his investment?

Answer 1

Answer:

- 15.75%

Explanation:

The computation of the rate of return on his investment is shown below:

= (Year end investment value - investment value + annual dividend) ÷ (Investment value)

= ($2,000 - $2,400 + $22) ÷ ($2,400)

= -$378 ÷ 2,400

= - 15.75%

Simply we divided the difference of investment and added the annual dividend and then divided it by the investment value