Math Word Problem

Question

Suppose that the dividend yield for a certain stock was 5% in 2017. If you purchased 26 shares at a price of $43 per share at the beginning of 2017 and kept your shares until the end of the year, what was your individual dividend for the year? 

Round your answer to the nearest dollar. 

Answer 1

A= Accumulated value (future)

P= present value

r= yearly interest rate as a decimal

t= number of time the interest is compounded per year

n= number of years interest is compounded

A = P ( 1 + [ n/t] ) ^ (nt)

A = 43 ( 1 + [ .05/1] ) ^ (1*1) = $ 45.15

$45.15 - $43 = $2.15 annual dividend each