Question

Alma recently purchased a mexican restaurant for $450,000 from which she expects to earn a monthly profit of $1,500. her expected annual rate of return is: 8 percent 4 percent 10 percent 6 percent

Answer 1

Alma expects a monthly profit of $1,500. It means that her annual profit would be:
$1,500 * 12 = $18,000
Therefore:
18,000 : 450,000 = x : 100
450,000 x = 1,800,000
x = 1,800,000 : 450,000 = 4%
Answer:
Here expected annual rate of return is: B ) 4 percent.