Compute the total and annual returns on the described investment. Six years after buying 50 shares of XYZ stock for
$70 per share, you sell the stock for $ 5600. The total return is %. ?
If you purchased 50 shares for $70 per share, then sold it 6 years later for $5,600, then the stock must have appreciated: $5,600 / 50=$112 per share in 6 years. So, your total profit would be:$5,600 - (50 x $70) =$2,100.
Your annual return on your stock would be:($112/$70)=1.6 - 1 x 100 =60% over 6 years. Or 60% / 6=10% per year-simple return.
