Select the correct answer.

A company made a profit of $25,000 over a period of 5 years on an initial investment of $10,000. What is its annualized ROI?

(final value - initial value)

? x 100

initial value

ROI!

ROI

annualized ROI = number of years

A. 50%

B. 25%

c. 30%

D. 40%

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Step-by-step explanation:

Given:

Initial Investment = 10,000

Total profit = 25,000

Total number of years = 5 years

Return on Investment = Gain from Investment - Cost of Investment

cost of investment

ROI = (25,000 - 10,000) / 10,000 = 15,000/10,000 = 1.5 x 100% = 150%

ROI = 150% : 5 years = 30% per year.