Let's solve this step-by-step based on the information provided in the image.

Given:

• You bought 100 shares of XYZ stock for $50 per share. This means the initial investment was: $\text{Initial Investment} = 100 \times 50 = 5000 \, \text{USD}$
• After 4 years, you sold the stock for $7,300.

Total Return:

The total return is calculated as the percentage increase in value over the initial investment.

$\text{Total Return} = \frac{\text{Final Value} - \text{Initial Value}}{\text{Initial Value}} \times 100$

Substitute the given values:

$\text{Total Return} = \frac{7300 - 5000}{5000} \times 100 = \frac{2300}{5000} \times 100 = 46\%$

So, the total return is 46%.

Annual Return:

The annual return (also known as Compound Annual Growth Rate, or CAGR) is the rate of return per year over the 4 years. It can be calculated using the formula:

$\text{Annual Return} = \left( \frac{\text{Final Value}}{\text{Initial Value}} \right)^{\frac{1}{n}} - 1$ Where $n$ is the number of years.

Substitute the values:

$\text{Annual Return} = \left( \frac{7300}{5000} \right)^{\frac{1}{4}} - 1 = (1.46)^{\frac{1}{4}} - 1$

Using a calculator:

$(1.46)^{\frac{1}{4}} \approx 1.098$

So,

$\text{Annual Return} \approx 1.098 - 1 = 0.098 = 9.8\%$

Thus, the annual return is 9.8%.

Final Answers:

• Total return: 46%
• Annual return: 9.8%

Do you have any further questions or would you like more details on any part of this process?

Related Questions:

1. How is the compound annual growth rate (CAGR) different from total return?
2. What would the total return be if the stock price after 4 years was $6,500 instead?
3. How would a dividend payment affect the calculation of returns?
4. Can total return be negative, and under what circumstances?
5. How can taxes on capital gains impact your final return?

Tip:

When calculating the annual return, it's important to account for the compounding effect over time, not just divide the total return by the number of years.