Answered

Westonci.ca is the ultimate Q&A platform, offering detailed and reliable answers from a knowledgeable community. Connect with professionals on our platform to receive accurate answers to your questions quickly and efficiently. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

Louis purchased $5,000 worth of stock three years ago and sold it today for $7,000. He received no dividends from this investment. Inflation averaged 4% during the three years he owned the stock. What was his annualized real rate of return on this investment?

Sagot :

abiolataiwo2015

Answer:

9.33%

Explanation:

Calculation to determine his annualized real rate of return on this investment

Annualized real rate of return=[($7,000-$5,000/ ($5000*3) *100] -4%

Annualized real rate of return=13.33%-4%

Annualized real rate of return = 9.33%

Therefore his annualized real rate of return on this investment will be 9.33%

Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Your questions are important to us at Westonci.ca. Visit again for expert answers and reliable information.