Monday
March 27, 2017

Post a New Question

Posted by on .

Purchased $10,000 in stock, invested $5000 of own money, borrowed remaining $5000 at 8% interest. Stock increases by 10%, what is the rate of the investor's return? I calculated 12%, is that correct?

  • Math - ,

    yes

  • Math - ,

    the value of the stock increased by $1,000 so sold for $11,000.
    The investor paid $10,000 + .08*5000 = $10,400
    So the investor made $600 on the out of pocket investment of $5,000
    (600/5000)*100 = 12 %

Answer This Question

First Name:
School Subject:
Answer:

Related Questions

More Related Questions

Post a New Question