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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 .)

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 \$ 20,880 and originally cost $18,000 \$ 18,000 ?\newline(Ignore the % \% symbol when entering your answer. For example, if the answer is 12% 12 \% , enter 1212 .)

Full solution

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 \$ 20,880 and originally cost $18,000 \$ 18,000 ?\newline(Ignore the % \% symbol when entering your answer. For example, if the answer is 12% 12 \% , enter 1212 .)
  1. Calculate Profit: We know:\newlineCurrent value of investment: $20\$20,880880\newlineOriginal cost of investment: $18\$18,000000\newlineWhat is the profit?\newlineProfit = Current value - Original cost\newline= $20\$20,880880 - $18\$18,000000\newline= $2\$2,880880
  2. Find Rate of Return: Now, we need to find the rate of return as a percentage.\newlineRate of return = ProfitOriginal cost×100\frac{\text{Profit}}{\text{Original cost}} \times 100\newline= $2,880$18,000×100\frac{\$2,880}{\$18,000} \times 100\newline= 0.16×1000.16 \times 100\newline= 16%16\%

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