Question

Bill and nine of his friends each contributed $10,000 to form a real investment group. The group then purchased a small retail center for $350,000 using an interest-only loan for $250,000 at 10% annual interest. At the end of one year, the building was sold for $410,000. What is the rate of return on bill's investment?

Answer 1

Step-by-step explanation:

loan amount = 250000

interest % = 10%

total amount to pay

=250000 + 250000 * 10%

= 275000

sold price = 410000

so, profit amount = 410000 - 275000 = 135000

bill and 9 friends = 10 person

profit devided by 10.

135000/10 = 13500 /each.

bill :-

invest amount = 10000

profit amount = 13500

profit = 3500

profit % = 3500/10000 *100

= 35%