Question

You recently invested $20,000 of your savings in a security issued by a large company. The security agreement pays you 8 percent per year and has a maturity two years from the day you purchased it. What is the Return on your investment and the Return of your investment?

Answer 1

	You Invested $ 20,000 in a security issued by a large Co.
	Note: As there is no information regarding Compounding, So we are doing a simple Calculation.
			In $
	Investment		20,000
	Interest		8% per anum
	Period		2 years
	Return
	Year 1	20000*8%	1600
	Year 2	20000*8%	1600
	Return of investment	=	3200
	Return on Investment	=	(Benefit/Cost of investment )*100
	Return on investment	(3200/20000)*100=	16%