You open a brokerage account and purchases 100 shares of a stock at a price of $20 per share. You borrow $800 from your broker to help pay for the purchase. Assume no transaction costs. After a year, the price has increased to $25 per share. What is your rate of return? Assume an interest rate of 10%. 25.00% O-31.26% O 41.67% 35.00% O-19.00%

College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 26E
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You open a brokerage account and purchases 100 shares of a stock at a price of $20 per share. You borrow $800 from your broker to help
pay for the purchase. Assume no transaction costs.
After a year, the price has increased to $25 per share.
What is your rate of return? Assume an interest rate of 10%.
O 25.00%
-31.26%
41.67%
O 35.00%
O-19.00 %
Transcribed Image Text:You open a brokerage account and purchases 100 shares of a stock at a price of $20 per share. You borrow $800 from your broker to help pay for the purchase. Assume no transaction costs. After a year, the price has increased to $25 per share. What is your rate of return? Assume an interest rate of 10%. O 25.00% -31.26% 41.67% O 35.00% O-19.00 %
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