Calculate the Rate of Return on an initial investment of $6,000 valued at $6,500. Responses8.3%8.3%6.5%6.5%4.3%4.3%9.5%
Question
Calculate the Rate of Return on an initial investment of 6,500.
Responses
8.3%
8.3%
6.5%
6.5%
4.3%
4.3%
9.5%
Solution
The rate of return is calculated using the formula:
Rate of Return = (Final Value - Initial Value) / Initial Value * 100%
Here, the initial investment is 6,500.
So, the rate of return is:
Rate of Return = (6,000) / $6,000 * 100%
Rate of Return = 6,000 * 100%
Rate of Return = 0.0833 * 100%
Rate of Return = 8.33%
So, the rate of return on the initial investment of 6,500 is 8.33%.
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