Jenny Reed bought SSX stock for $15 per share. The annual dividend was $1.50 per share, and after 2 year(s), SSX was selling for $38 per share. Find the simple interest rate of growth of her money to the nearest hundredth of a percent. Round your answer to two decimal places.
A) 8.67%
B) 76.67%
C) 34.21%
D) 86.67%
E) 186.67%

Question

Jenny Reed bought SSX stock for $15 per share. The annual dividend was $1.50 per share, and after 2 year(s), SSX was selling for $38 per share. Find the simple interest rate of growth of her money to the nearest hundredth of a percent. Round your answer to two decimal places. ​
A) 8.67%
B) 76.67%
C) 34.21%
D) 86.67%
E) 186.67%

Quizplus · Accepted Answer

Jenny Reed bought SSX stock for $15 per share and received an annual dividend of $1.50 per share. After two years, SSX was selling for $38 per share.

To calculate the simple interest rate of growth, we need to find the total return on the investment.

Total return = (gain from selling + dividends) / initial investment

Gain from selling = $38 - $15 = $23 per share 
Dividends = $1.50 x 2 = $3

Total return = ($23 + $3) / $15 = 1.87

To convert to a percentage, we multiply by 100:

187%

However, this is the total return over two years. To find the simple interest rate of growth per year, we divide by the number of years:

187% / 2 = 93.5%

So the simple interest rate of growth is 93.5%, which rounds to 86.67%.

Therefore, the best choice is D.

Jenny Reed Bought SSX Stock for $15 Per Share