Suggested Lesson Plan
for this Worksheet
An investor is someone who commits money,
time, or their own effort to get a return on that investment. One way to measure the value of
that return is called return on investment, or ROI.
Return on investment is a calculation of the amount, or percentage,
that you have earned (or lost) on an investment you have made. Returns may
be positive or negative. A positive return on
investment would mean you earned money, and a negative return would mean you
lost money. Return on investment is a percentage of the original amount
Related to return on investment is risk.
Risk is the chance that you will lose money. Different types of
investments will give you different returns, and different amount of risk.
In general, if you invest in an opportunity with a lot of risk, then you
should expect to get a higher return on investment. Low risk investments
should give you a lower return on investment. For example, if you place
your money in an insured bank account, your money might be pretty safe, but the
return may be 1%. If you invest in stocks, you might earn 8%.
However, stocks are more risky, and you actually might lose money instead.
R - I
Money received after
making the investment.
Example: John invests $100 in a mutual
fund for one year. At the end of the year he has $108. What was his
return on investment?
Answer: 108-100 = 8. 8/100
= .08 .08 * 100 = 8%
This worksheet is an introduction to investing
and the concept of return on investment. Students need to fill in the table with the missing
values for each of the problems.
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