Question

Royale Real Estate Group bought property for $1,000,000. Royale then sold the property 40 years later for $800,000.What was Royale Real Estate Group's return on investment?

Answer 1

The return of any investment is measured by the difference of the value it was sold with the value it was bought.

It means:

`R=B-S`

Substituting the values, we have the following answer:

`\begin{gathered} R=800,000-1,000,000 \\ R=\text{ \$}-200,000 \end{gathered}`

From the solution developed above, we conclude that the return is negative. It was a return of $ -200,000

The percentage can be calculated as follows:

`\begin{gathered} R_p=(R)/(B)*100 \\ R_p=(-200,000)/(1,000,000)*100 \\ R_p=-20\text{ \%} \end{gathered}`

The return of the present investment is -20%