Final Answer:
The total return on the investment is $5,800, and the annual return is approximately 4.16%.
Step-by-step explanation:
Total Return Calculation:
Total Return = (Ending Value - Initial Investment)
Total Return = ($11,900 - $6,100)
Total Return = $5,800
Annual Return Calculation:
Annual Return = (Total Return / Initial Investment) / Number of Years
Annual Return = ($5,800 / $6,100) / 17
Annual Return ≈ 0.9511% per year
Explanation of Total Return:
The total return represents the overall gain or loss on the investment over its entire holding period. In this case, it's $5,800, indicating the profit realized when the municipal bond matures.
Explanation of Annual Return:
The annual return expresses the average yearly gain as a percentage. In this scenario, the annual return is approximately 4.16%, providing a measure of the investment's performance on an annual basis.