Question

Rani bought a rental property for $167,000 with no borrowed funds. Later, she sold the building for $180,000. What was her return on investment? (Enter your answer as a percent rounded to 2 decimal places.)

Return on investment .......

Answer 1

Rani's return on investment for the rental property is approximately 7.78%.

Step-by-step explanation:

To calculate the return on investment (ROI), we need to find the difference between the selling price and the purchase price, and then divide that by the purchase price. In this case, Rani bought the rental property for $167,000 and sold it for $180,000. To calculate the ROI, we use the formula:

ROI = (Selling price - Purchase price) / Purchase price

Substituting in the values:

ROI = (180,000 - 167,000) / 167,000

Simplifying the equation gives:

ROI = 13,000 / 167,000

Dividing gives:

ROI ≈ 0.0778

Converting to a percentage, the return on investment is approximately 7.78%.