Terri buys a house for $200,000 and expects to sell it in three years for $300,000. Her expected percentage rate of return over that three-year period is

Question

Quizplus · Accepted Answer

To calculate the expected percentage rate of return, we need to use the formula:

Expected percentage rate of return = ((final value - initial value) / initial value) * 100

Substituting the given values:

Expected percentage rate of return = ((300,000 - 200,000) / 200,000) * 100

= (100,000 / 200,000) * 100

= 50 percent

Therefore, the expected percentage rate of return over the three-year period is 50 percent. The best choice is C.

Terri Buys a House for $200,000 and Expects to Sell