Asked by Toronto Raptor on Jun 13, 2024
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Last year, the Muirs purchased a rental condo in Woodbridge for $300,000. During the year, they paid $4,000 for property taxes and $2400 for repairs, and collected $1850 per month in rent. The home has increased in value to $335,000. Calculate the following:
a) Income yield.
b) Capital gain yield.
c) Rate of total return.
d) Total return.
Capital Gain Yield
The price appreciation component of the total return on an investment, calculated as the change in the price of the investment over a period of time.
Total Return
Represents the full return on an investment over a given time period, including capital gains, dividends, and interest.
Income Yield
The income returned on an investment, usually expressed as a percentage of the amount invested.
- Compute the comprehensive return on investment, incorporating income yield as well as capital gain yield.
- Compute total returns considering both income and appreciation aspects of an investment.
Verified Answer
Learning Objectives
- Compute the comprehensive return on investment, incorporating income yield as well as capital gain yield.
- Compute total returns considering both income and appreciation aspects of an investment.
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