An investment in a new product costs 6 million In one year i

An investment in a new product costs $6 million. In one year it will sell for $7.5 million and will also earn $1 million in income for the year. The market interest rate is 20%. What is the percentage rate of return on this investment? Also, please show how to entering number in financial calculator HP 10bII+

Solution

The net income for year 1=7.5mn+1mn=8.5mn

The investment=6mn

THe return on investment=(income-investment)/investment

=41.67%

same forumaule can be used in HP 10bl+