Question

you invested $2000 in the stock market one year ago. Today the investment is valued at 1,820

Problem 4-35 Solving for Rates (LG4-7) You invested $2,000 in the stock market one year ago. Today, the investment is valued at $1,820. What return did you earn? (Negative answer should be indicated by a minus sign.) Return earned What return would you need to get next year to break even overall? (Do not round intermediate calculatiom 2 decimal places.) 9% Return earned

Answer 1

Return = -180/2000= -9%

Here , the denominator is 2000 because our starting investment value is $2000

Return needed to break even overall = 180/1820 = 9.89%

Here , the denominator is $1820 because thats the beginning investment value for the new year