Real Estate Math
A Virginia investor buys a vacant lot for $120,000 and sells it 18 months later for $144,000. What is the annual rate of return (simple interest)?
A16.67%
B20%
C13.33%✓ Correct
D11.11%
Explanation
Gain = $24,000. Simple rate for 18 months = $24,000 ÷ $120,000 = 20% for 18 months. Annual rate = 20% ÷ 1.5 = 13.33%.
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