Answer:
Rate of return = 9.33%
Explanation:
As for the provided information, we have:
Bill and his nine friends invested $10,000 each = $10,000 (Bill + 9 ) = $10,000 [tex]\times[/tex] 10 = $100,000
Extra loan taken = $250,000
Interest on such for the year = $250,000 [tex]\times[/tex] 10% = $25,000
Interest expense for each individual = $25,000/10 = $2,500
Share of loan for each person = $250,000/10 = $25,000
Total cost of retail center to each person = $10,000 + $25,000 + $2,500
= $37,500
Return on investment = $410,000
Return share of each individual = $410,000/10 = $41,000
Net return to each individual = Return - Cost = $41,000 - $37,500 = $3,500
Net rate of return = [tex]\frac{3,500}{37,500} \times 100 = 9.33[/tex]
