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?

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 %

Respond to this Question

Similar Questions

Calculus - If you invest $5000 in a stock that is increasing in value at the ...

Anonymous - 9. What will be the investorâ€™s return if a stock rises by 7% if ...

Algebra - Larry invested a total of $5000 in three stocks during the first year ...

math - Shirley has $16,000 invested in Boeing and GE stock. The Boeing stock ...

math - Shirley has $16,000 invested in Boeing and GE stock. The Boeing stock ...

math-finance - Colin borrowed some money at 7.16%?a compounded quarterly. three ...

personal finance - Jo owns 150 shares of Delta General stock. She purchased the ...

Acounting - How can I make journal entry for a corporation called H who is ...

Precalculus - Suppose that an investor wants to invest up to 10,000. She plans ...

adult education - California Clinics, an investor-owned chain of ambulatory care...