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QuestionCalculate the rate of return for 15 shares of Stock A bought at \15eachandsoldfor$330witha$6commission.RateofReturn15 each and sold for \$330 with a \$6 commission. Rate of Return =[?] \%$

Studdy Solution

STEP 1

Assumptions1. The number of shares of Stock A purchased is15. The purchase price per share is \$153. The total sale price of the shares is \$3304. The commission on the sale is \$65. The rate of return is calculated as ((Sale price - Purchase price - Commission) / Purchase price) *100%

STEP 2

First, calculate the total purchase price of the shares. This is done by multiplying the number of shares by the purchase price per share.
Purchase price=Number of sharestimesPurchase price per sharePurchase\, price = Number\, of\, shares \\times Purchase\, price\, per\, share

STEP 3

Now, plug in the given values for the number of shares and purchase price per share to calculate the total purchase price.
Purchase price=15times$15Purchase\, price =15 \\times \$15

STEP 4

Calculate the total purchase price.
Purchase price=15times$15=$225Purchase\, price =15 \\times \$15 = \$225

STEP 5

Now, calculate the net sale price. This is the total sale price minus the commission.
Net sale price=Sale price−CommissionNet\, sale\, price = Sale\, price - Commission

STEP 6

Plug in the values for the sale price and commission to calculate the net sale price.
Net sale price=$330−$6Net\, sale\, price = \$330 - \$6

STEP 7

Calculate the net sale price.
Net sale price=$330−$6=$324Net\, sale\, price = \$330 - \$6 = \$324

STEP 8

Now, calculate the rate of return. This is done by subtracting the purchase price from the net sale price, dividing by the purchase price, and then multiplying by100% to convert to a percentage.
Rate of return=(Net sale price−Purchase pricePurchase price)times100%Rate\, of\, return = \left(\frac{Net\, sale\, price - Purchase\, price}{Purchase\, price}\right) \\times100\%

STEP 9

Plug in the values for the net sale price and purchase price to calculate the rate of return.
Rate of return=($324−$225$225)times100%Rate\, of\, return = \left(\frac{\$324 - \$225}{\$225}\right) \\times100\%

STEP 10

Calculate the rate of return.
Rate of return=($324−$225$225)times100%=44%Rate\, of\, return = \left(\frac{\$324 - \$225}{\$225}\right) \\times100\% =44\%However, we need to round the rate of return to the nearest tenth.

STEP 11

Round the rate of return to the nearest tenth.
Rate of return=44.0%Rate\, of\, return =44.0\%The rate of return is44.0%.

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