George buys an antique car for $20,000 and sells it ﬁve years later for just over $24,000. George's per-year rate of return is

Question

Quizplus · Accepted Answer

The rate of return per year is calculated by finding the total return, dividing it by the initial investment, and then dividing by the number of years. George made $4,000 over 5 years on a $20,000 investment. ($4,000 / $20,000) / 5 = 0.04, or 4% per year.

George Buys an Antique Car for $20,000 and Sells It