Answer:
Rate of return = 16%
Step-by-step explanation:
The computation of the rate of the return is shown below:
Data provided in the question
Current value of the investment = $20,880 = C
Originally cost = $18,000 = O
N = Net earnings = C - O
= $20,880 - $18,000
= $2,880
Based on the above information, the rate of return is
[tex]= \frac{N}{O} \\\\ = \frac{\$2,880}{\$18,000}[/tex]
= 16%
Hence, the rate of return is 16%
