Homework Answers
Price of each sprint stock share = $6.38
Total number of shares purchased = 100
Total amount spent on buying shares = $638
Selling price of 100 shares = $1,200
Time = 3 years
To calculate the rate of interest, the following formula of future value can be used:
F.V. = P(1 + r)n
Where
F.V. is the future value, P is the principal amount, r is the rate of interest and n denotes the number of periods.
Putting the values:
1.2344 = (1 + r)
r = 0.2344
Therefore, the rate of interest is 23.44% (approximately).
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