Based on the expenses involved in running the property, and the rental amount, the return on the investment would be 18.82%.
The ratio of net income to investment is known as return on investment (ROI). A high return on investment (ROI) indicates that the investment's benefits outweigh its cost.
ROI is a performance indicator that is used to assess an investment's effectiveness or to compare the efficiencies of several distinct investments.
First, find the amount earned per year:
= 850 x 12
= $10,200
The yearly expenses would be:
= (390 x 12) + (70 x 12) + (380 x 2) + 500 + (125 x 12)
= 4,680 + 840+ 760+ 500 + 1500
= $8280
The annual ROI is:
ROI= (10,200 - 8280) / 10,200 x 100%
ROI = 18.82%
Therefore the expenses involved in running the property, and the rental amount, the return on the investment would be 18.82%.
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