Question

Laverna invested $4,000 in bonds. The bonds matured to a value of $4,900 after 3 years.What was Laverna's return on investment after 3 years?Round to the nearest tenth of a percent, if necessary.

Answer 1

The return on investment (ROI) is given by:

`_{\text{ }}ROI=\frac{Net_{\text{ }}return_{\text{ }}on_{\text{ }}investment}{_{\text{ }}Cost_{\text{ }}of_{\text{ }}_{\text{ }}investment}\text{ }_{}*100`

Where:

Net return on investment = $4900 - $4000 = $900

Cost of investment = $4000

Therefore:

`_{\text{ }}ROI=(900)/(4000)*100=22.5`

Answer:

22.5%