Matt invested $1500 into a stock of his choice. After two years, he had received

For this query, the time presented seems unclear to me. I understand that the rate of return is determined by total return over the investment. Assuming Matt received $400 as dividends without reinvesting them into additional shares, his total return across two years amounted to $500. Conversely, if the dividends were reinvested into the stock—something that typically happens with a 401(k) or IRA—his ROI would render a mere 6% due to only a $100 gain on a $1500 investment. In an actual market scenario, it’s likely that Matt would have experienced about a 5% return on a solid stock, while Bella would have had approximately 0.05% from a savings account.

I hope this was helpful!;)