February 24th, 2019, 01:08 AM  #1 
Newbie Joined: Feb 2019 From: moon Posts: 2 Thanks: 0  Total yield
Hello, I'm unsure about a simple total yield math problem. Here it is: If a project is USD100 and in year 1 you make USD10 rent and in year 2 you make USD12 and in year 3 you make USD12 and in year 3 you sold the project for USD128 at the end of year 3 with a rental yield of 7%. What is the total yield of this project? Ok so total yield is just the income return on the investment, so it should be calculated as: ((10+12+12)/100)*100=(34/100)*100 = (total rental income/initial investment)*100 Which is 34%, right? I'm just wondering whether I should use the 7% somewhere or is it just a useless information. Thanks for the help 
February 26th, 2019, 07:37 AM  #2 
Math Team Joined: Jan 2015 From: Alabama Posts: 3,264 Thanks: 902 
I don't know what selling something "with a rental yield of 7%" means. Selling something does not involve renting it! Was the word "rental" actually in the problem or was it just "with a yield of 7%"? Assuming this was purchased for USD 100 and then sold for "a yield of 7%" then it was sold for a yield of 0.07(100)= USD 7. Adding to that the rentals of 10+ 12+ 12= USD32 the total yield is USD 39. "Yield" is not a percentage so there is no reason to divide by 100. Last edited by skipjack; February 28th, 2019 at 06:01 AM. 
February 28th, 2019, 12:07 AM  #3 
Newbie Joined: Feb 2019 From: moon Posts: 2 Thanks: 0 
Hi and thanks for the reply! The word "rental" was in the problem, and I think that is what confused me. Anyway, thanks for the answer, it makes sense 
February 28th, 2019, 09:25 AM  #4 
Math Team Joined: Oct 2011 From: Ottawa Ontario, Canada Posts: 14,597 Thanks: 1038  Code: year gain balance 0 100 1 10 110 2 12 122 3 12 134 3 7 141 

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