At the beginning of the year, John Stewart invested $10,000. Twelve months later, John sold his investment for $11,000. Assuming he received no dividends or interest during this time, what is his rate of return?

Question

Quizplus · Accepted Answer

The rate of return is the percentage increase in the value of the investment over a period of time. In this case, John invested $10,000 and sold it for $11,000. The increase in value is $11,000 - $10,000 = $1,000. To calculate the rate of return, divide the increase in value by the original investment and multiply by 100 to get a percentage: 
($1,000 / $10,000) x 100 = 10 percent. Therefore, the correct answer is C) 10 percent.

At the Beginning of the Year, John Stewart Invested $10,000