Question 4

A man pays 40 times the annual rent to purchase a building. The rate % per annum he derives from his investment is

Solution

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Let the Rent be 'K' per annum . Now it is said that man purchases at single go the property at the value of 40(K).

So, the investment = 40(K) 
Rate of returns = $$\ \dfrac{\ Annual Returns\ }{Investment}\times100$$
                       = $$\dfrac{\ K}{40K}\times100$$
                       =  2.5 %Â