# Math

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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 %

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