Question

Saeed needs money to purchase tools, basic office supplies, parts to refurbish equipment, accounting software, and legal help fees. Believing Saeed's business will be a success, an investor invests $5,000 to help Saeed open his business. In return, Saeed agrees to repay the investor the $5,000 plus 17 percent of the profits of the business. Calculate the return on investment for the investor if Saeed's business makes $7,000 in profit as a total return of the business in its first year. Show your work as part of your answer.

Answer 1

$1,190

Step-by-step explanation:

Data given in the question

Invested amount = $5,000

Profit percentage = 17%

Profit as a total return = $7,000

So by considering the above information, the return on investment is

= Profit as a total return × Profit percentage

= $7,000 × 17%

= $1,190

By multiplying the total return with the profit percentage we can determine the return on investment can arrive