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17 August, 12:21

Tammy can buy an asset this year for $1,000. She is expecting to sell it next year for $1,050. What is the asset's anticipated percentage rate of return?

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  1. 17 August, 14:11
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    The asset's anticipated percentage rate of return is 5%

    Explanation:

    Rate of return is the annual return that an investor earns on an Initial investment in an asset.

    RatReturn on Asset = Expected selling price - Initial Purchase price

    Return on Asset = $1,050 - $1,000

    Return on Asset = $50

    Rate of return = Return on Asset / Initial Purchase price = $50 / $1,000 = 0.05 = 5%
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