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4-year holding period yield

Suppose it is now Jan. 1, 2007, and you just sold an investment that you own for $12,500. You purchased the investment 4 years ago for $10,500. During the time you held the investment, it paid income equal to $1,000 each year. What is the 4-year holding period yield that you earned on your investment?

Please show how you arrive at your answer.

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Solution Preview

Suppose it is now Jan. 1, 2007, and you just sold an investment that you own for $12,500. You purchased the investment 4 years ago for $10,500. During the time you held the investment, it paid income equal to $1,000 ...

Solution Summary

This solution is comprised of a detailed explanation and calculation to find the 4-year holding period yield that investor earned on investment.

$2.19