Compute the total and annual returns on the described investment.
-Five years after buying 200 shares of $X Y Z$ stock for $\$ 30$ per share, you sell the stock for $\$ 10,000$.

Question

Quizplus · Accepted Answer

The total investment cost is $200 \times \$30 = \$6,000$. Selling the stock for \$10,000 results in a profit of $ \$10,000 - \$6,000 = \$4,000$. The total return is $\frac{\$4,000}{\$6,000} \times 100\% = 66.67\%$. To find the annual return, we use the formula for compound annual growth rate (CAGR): $\left(\frac{\text{Ending Value}}{\text{Beginning Value}}\right)^{\frac{1}{\text{Number of Periods}}} - 1$. Plugging in the values gives us $\left(\frac{\$10,000}{\$6,000}\right)^{\frac{1}{5}} - 1 = 10.76\%$.

Compute the Total and Annual Returns on the Described Investment XYZX Y ZXYZ

Compute the Total and Annual Returns on the Described Investment $X Y Z$