What Is the Rate of Return on an Investment If

question 118

Multiple Choice

What is the rate of return on an investment if you lend $1,000 and are repaid $1,254.70 two years later?

• A)12%
• B)25%
• C)6%
• D)18%
• E)4%

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Definitions:

Farmer's Market

A public and recurring assembly of farmers or their representatives selling the food and products they produce directly to consumers.

Implicit Costs

The opportunity costs of using resources that a company already owns, not directly paid for with cash.

Accounting Profit

The total revenue of a business minus the explicit costs, representing the financial gain in accounting terms.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, representing the additional return over the investor's opportunity cost.