Answer: 10%
Explanation:
Given that :
Worth of investment = $1,000,000
Worth after 1 year = $1,300,000
Worth after 2 years = $1,200,000
From the above, investment recorded $300,000 increase after one year and $100,000 Depreciation at the end of the second year.
Therefore, Net increase:
$300,000 - $100,000 = $200,000 (after 2 years)
Therefore, average yearly/annual increase = $200,000 / 2 = $100,000
Therefore, the annual return on the investment is :
(Annual increase / investment worth) × 100%
(100,000 : 1,000,000) × 100%
0.1 × 100% = 10%
= 10%
