Answer:
20%
Explanation:
Rate of returns is expresses as a percentage of the amount a person receives after the cost of investment over a period of time.
Rate of returns (ROR) = [tex]\frac{F.V - O.V}{O.V}[/tex] × 100
F.V = Future value
O.V= original value
Future value is the future price of the annuity and original value is the current price.
future value per month in 20 years= $250 × 12 × 20= $60000
original value = $50000
ROR = [tex]\frac{60000-50000}{50000}[/tex] × 100
ROR =[tex]\frac{10000}{50000}[/tex] × 100
ROR =0.2×100=20%
Rate of return on this investment is 20%
