Yar Ebadi lost $5,000 on an investment which represented a 10% negative rate of return after one year.How much did Yar invest?
A)$55,000
B)$45,000
C)$50,000
D)Can not be determined given the information available

Question

Quizplus · Accepted Answer

We can use the formula for rate of return:

(rate of return) = (ending value - beginning value) / beginning value

We know the rate of return (-10%) and the loss ($5,000), so we can set up an equation:

-0.1 = (-$5,000) / beginning value

Solving for beginning value:

beginning value = ($5,000) / 0.1 = $50,000

Therefore, Yar invested $50,000. The answer is C.

Yar Ebadi Lost $5,000 on an Investment Which Represented a 10