Question

Dave bought a rental property for $490,000 cash. one year later, he sold it for $500,000. what was the percentage return on his $490,000 investment?

Answer 1

The answer is "2.04%".

Step-by-step explanation:

Purchase price = $490,000

Selling price = $500,000

Percentage return on his investment = ?

Return on investment = Profit / Purchase price

Profit = Selling price − Purchase price

Return on investment = (Selling price − Purchase price) / Purchase price

= ($500,000 - $490,000) / $490,000

= $10,000 / $490,000

= 0.0204

To find percentage, multiply it with 100;

0.0204 x 100 = 2.04%

Thus the percentage return on his $490,000 investment = 2.04%