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Greg initially invested $7,000 in a transportation company. The company recently paid annual dividends of $86 and his year-end investment value was $8,340. What was the rate of return on his investment? A. 22.00% B. 17.10% -C. 17.91% D. 20.37% E. 15.04%

Respuesta :

Answer:

option (D) 20.37%

Explanation:

Year-end investment value = $8,340

initial invested amount = $7,000

annual dividends = $86

Increase in value

= (year-end investment value - initial invested amount) + annual dividends

= ($8,340 - $7,000) + $86

= $1,340 + $86

= $1,426

Now,

Return on investment = [tex]\frac{\textup{Increase in value}}{\textup{initial invested}}\times100\%[/tex]

or

Return on investment =  [tex]\frac{\$1,426}{\$7,000}\times100\%[/tex]

or

Return on investment =  20.37%

Hence,

The answer is option (D) 20.37%

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