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P8-4 (similar to) Returns. What are the returns on the following investments, ? Investment Original Cost of Investment $600 S
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Answer #1

- Calculating % Return of Investment CD:-

Buying Price = $600

Selling Price = $650

Income = $0

Percentage Return = [(Selling Price - Buying Price)+Income]/Buying Price

=[($650 - $600)+$0]/$600

=8.33%

- Calculating % Return of Investment Stock:-

Buying Price = $15

Selling Price = $4

Income = $2

Percentage Return = [(Selling Price - Buying Price)+Income]/Buying Price

=[($4 - $15)+$2]/$15

= -60%

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