Alex invests $2,000 in a company's stock. After a year, the value of Alex's stock has increased to $2,500. What rate of return has Alex received?

The rate of interest is 25%

Explanation:

Given:

Principal, P = $2,000

Amount, A = $2500

Time, t = 1 year

Rate of Interest, r = ?

We know:

On substituting the value we get:

Therefore, the rate of interest is 25%

Rate of return Alex has received is 25% .

Step-by-step explanation:

Here we have , Alex invests $2,000 in a company's stock. After a year, the value of Alex's stock has increased to $2,500. We need to find What rate of return has Alex received . Let's find out:

Alex initially invested $2000 in a company and after a year Alex's stock has increased to $2500 i.e. by :

⇒

⇒ $

So, rate of return Alex has received is given by :

⇒

⇒

⇒

⇒

Therefore , Rate of return Alex has received is 25% .