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Invest [tex]$100 in stocks and sell them one year later for $[/tex]115.

Calculate the ROI dollar amount and percentage:
1. Subtract the initial investment from the total return to get the ROI dollar amount.
2. Divide the ROI dollar amount by the initial investment.
3. Multiply that number by 100 to get the percentage.

Describe at least three investments you want to make with your income. Explain whether each one is an equity investment or a debt investment, and why you chose these particular types of investments. (1-6 sentences)



Answer :

GinnyAnswer
### Step-by-Step Solution:

#### Calculating ROI Dollar Amount and Percentage

1. Initial Investment:
- You invested [tex]$100 in stocks. 2. Final Value: - After one year, you sold the stocks for $[/tex]115.

3. Calculate the ROI Dollar Amount:
- ROI (Return on Investment) dollar amount is calculated by subtracting the initial investment from the final value.
- ROI dollar amount = Final Value - Initial Investment
- ROI dollar amount = [tex]$115 - $[/tex]100
- ROI dollar amount = [tex]$15 4. Calculate the ROI Percentage: - ROI percentage is calculated by dividing the ROI dollar amount by the initial investment and then multiplying by 100. - ROI percentage = (ROI Dollar Amount / Initial Investment) * 100 - ROI percentage = ($[/tex]15 / [tex]$100) * 100 - ROI percentage = 0.15 * 100 - ROI percentage = 15% So, the ROI dollar amount is $[/tex]15, and the ROI percentage is 15%.

#### Recommendations for Investments

Here are three investments I would like to make with my income, along with explanations and classifications:

1. Stock Market (Equity Investment):
- Explanation: I want to invest in the stock market because it has the potential for high returns over the long term. Stocks represent ownership in a company, and as the company grows and becomes more profitable, the value of the stocks increases.
- Classification: This is an equity investment because it involves owning shares of a company.

2. Government Bonds (Debt Investment):
- Explanation: Buying government bonds is a safer investment as they are backed by the government and provide stable returns with low risk. Government bonds pay interest over time and return the principal at maturity.
- Classification: This is a debt investment because you are lending money to the government in exchange for interest payments.

3. Real Estate (Equity Investment):
- Explanation: I want to invest in real estate for both property appreciation and rental income. Real estate can provide a steady rental income and has the potential to appreciate significantly over time.
- Classification: This is an equity investment because it involves owning a tangible asset (property).

Each of these investments serves a different purpose: stocks for potential high returns, bonds for stability and security, and real estate for passive income and long-term appreciation.