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Calculating Rates of Return Suppose an investment offers to quadruple your money in 12 months (don’t believe it). What rate of return per quarter are you being offered?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Calculating Rates of Return Suppose an investment offers to quadruple your money in
12 months (don’t believe it). What rate of return per quarter are you being offered?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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