moral dilemmas. Interest Rate and Rate of Return Abby purchased 100 shares of he
ID: 2816510 • Letter: M
Question
moral dilemmas. Interest Rate and Rate of Return Abby purchased 100 shares of her dad's favorite stock for $25.80 per share exactly 1 year ago, com- mission free. She sold it today for a total amount of $2865. She plans to invest the entire amount in a different corporation's stock today, but must now pay a $50 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but 1.11 neglect any tax effects. r- h- it, 1.12 In order to build a new warehouse facility tha regional distrihnt eExplanation / Answer
cost of earlier stock
100*25.80
2580
total amount received on selling of earlier stock
2865
amount of return
2865-2580
285
% rate of return
(285/2580)
11.05%
Amount invested in new stock
2865-50
2815
rate of return on investment - same as on earlier stock
2815*(1+11.05%)
3126.058
Amount to be received next year
3126.058
cost of earlier stock
100*25.80
2580
total amount received on selling of earlier stock
2865
amount of return
2865-2580
285
% rate of return
(285/2580)
11.05%
Amount invested in new stock
2865-50
2815
rate of return on investment - same as on earlier stock
2815*(1+11.05%)
3126.058
Amount to be received next year
3126.058
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