The rate of return is the profit or loss on an investment as a percent of the initial investment cost. What is the rate of return on an investment that is now worth $20,880 and originally cost $18,000 ?(Ignore the % symbol when entering your answer. For example, if the answer is 12%, enter 12 .)
Q. The rate of return is the profit or loss on an investment as a percent of the initial investment cost. What is the rate of return on an investment that is now worth $20,880 and originally cost $18,000 ?(Ignore the % symbol when entering your answer. For example, if the answer is 12%, enter 12 .)
Calculate Profit: We know:Current value of investment: $20,880Original cost of investment: $18,000What is the profit?Profit = Current value - Original cost= $20,880 - $18,000= $2,880
Find Rate of Return: Now, we need to find the rate of return as a percentage.Rate of return = Original costProfit×100= $18,000$2,880×100= 0.16×100= 16%
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