# Finance stock homework help

1. Nov 26, 2005

### rain

I need some help on some finance questions
1) A stock that sold for $22 at the beginning of the year was selling for$24 at the end of the year. If the stock paid a dividend of $0.50 per share, what is the simple interest rate on an investment in thei stock? the simple interest rate formula is A=P(1+rt) so A=24 P=22 t=1 r=? am I on the right tract? What do you do with the$0.50 per share?

Can we assume that he pays the $80,000 principal back at the end of the 5 years? Because if he pays back part of the principal each month, say, the formula becomes a lot more complicated! Yes, assuming that, as I just said, he has to pay interest on the entire$80,000 for the entire 5 years, you can use A= P(1+i)n. However, because it is "compounded quarterly" you have to figure it in quarters. i= 0.10/4= 0.025, the interest per quarter instead of per year. And, of course, n= 4*5= 20 quarters, not 5 years. Taking P= 80000, find A. That's the entire amount paid- principle and interest. Subtract the $80,000 principle to find how much of it was interest. You can approximate that, to check your answer, by using simple interest. At 10% interest for 5 years, his interest would amount to 5*10%= 50%. 50% of$80,000 is $40,000. Of course, compounded quarterly, his interest will amount to more than that. Since this problem doesn't have anything to do with "Calculus and Analysis" and looks to me like homework, I am moving it Last edited: Nov 26, 2005 3. Nov 27, 2005 ### rain for 1) the rate is 11.36% for 2) the interest is$51089.32
am i correct?

4. Nov 27, 2005

### HallsofIvy

Staff Emeritus
That's what I get.

5. Nov 27, 2005

thanks a lot