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Question5 Real Estate Inc purchased shares in Echelon Estate as an investment. Seeing that financial analysts had predicted that Echelon Estate would do very well,

Question5

Real Estate Inc purchased shares in Echelon Estate as an investment. Seeing that financial analysts had predicted that Echelon Estate would do very well, Real Estate Inc expected a good return on its investment. The investment originally cost R2 500 000 and Real Estate Inc received R150 000 at the end of the first year. Based on market values, the investment is now worth R2 800 000. What is the return on the investment?

1. 6%

2. 12%

3.16%

4. 18%

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