You purchased a house for $330,000 cash one year ago. You can sell it today for $277,000. What rate of return did you earn on this investment? Round your answer to the nearest tenth
Of a percent.

Question

Quizplus · Accepted Answer

To calculate the rate of return on this investment, we need to use the formula:
Rate of Return = (Sale Price - Purchase Price) / Purchase Price x 100%
Plugging in the given values:
Rate of Return = ($277,000 - $330,000) / $330,000 x 100%
Rate of Return = -$53,000 / $330,000 x 100%
Rate of Return = -0.1606 x 100%
Rate of Return = -16.1%
Therefore, the correct answer is C) -16.1%. We can calculate the rate of return using the formula:

Rate of return = (selling price - purchase price)/purchase price * 100%

Substituting the given values, we get:

Rate of return = (277,000 - 330,000)/330,000 * 100%
Rate of return = -53,000/330,000 * 100%
Rate of return = -16.1%

The negative rate of return indicates a loss on the investment. Therefore, the best choice is option C.

You Purchased a House for $330,000 Cash One Year Ago