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Rate of Return

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Suppose that in August 1997 you purchased shares in Staples, Inc. (NASDAQ: SPLS). It is now five years later and you decide to evaluate your holdings to see if you have done well with this investment. The table below shows the market prices of SPLS:

Year 1997 1998 1999 2000 2001 2002

Price $12.3125 $29.1250 $20.7500 $11.8125 $18.6875 $14.0625

Create a formula to calculate your rate of return for each year.

What is your overall return over the life of your investment?

What is the average annual return over the life of the investment? Use the geomean function.

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