Investors are thinking of buying shares in computer companies
Calculate the rate of return on investment using this formula
Rate of Return = (Future Price – Initial Price + Dividend) / Initial Price
The price of the shares is initially $60 and is projected to increase in the future by $100. Each year, the dividend payment is expected to be around $3 per share. We can use this information to determine a return rate as follows.
Rate of Return = ($100 – $60 + $3) / $60 = 10%
The investor, therefore, can earn 10% on her investment over the course of 3 years if everything goes as planned.