Bali purchases 75 shares of a stock for $37.75. In 7 years, he sells the stock for $3,190.19. He calculates his ROI, shown below. Did he do this correctly? If not, what error did he make?

Question

37.75(75) - 3190.19/37.75(75)= -12.7% ROI

A. Yes, he solved it correctly.
B. No, he divided by the wrong number.
C. No, he should have a positive ROI.
D. No, he incorrectly calculated his initial investment.

I'm not too sure about this one, I think either d or c.

Answer 1

investment = 37.75(75) = 2831.25
selling price = 3,190.19
profit = 3,190.19 - 2831.25 = 358.94
rate of investment = 358.94/2831.25 = .12377.. or appr 12.38%

his calculation should have been:
(3190.19 - 37.75(75) / (37.75(75))

the correct choices would have been C AND D

Answer 2

It’s option D. He incorrectly calculated his initial investment.