Question

- To on the following investment. Five years after paying $3900 for shares in a startup company, you sell the shares for $1600 (at a loss). The total return is %. (Do not round until the final answer. Then round to the nearest tenth as needed.)

Answer 1

Breakup of the Question	$
Amount invested in shares	3900
Before	5	years
Value	1600
After	5	years
Decrease	2300	in 5 years
The value after 5 years is	0.589744	of the value invested before 5 years
As per the Present value table
An amount is 0.567 at 12% rate of return
An amount is 0.593 at 11 % rate of return
It means that the rate is somewhat between 11% to 12 % , which has
The approximate rate of return is 11.43845%	11.43845%
The cumulative rate for 5 years is	3.696
The Cumulative discounted rate of return in five years is ( in % )	42.2765112
Rounded off	42.28