The correct answer is C, approximately 28.79%.
First calculate the dollar profit:
$425,000 − $330,000 = $95,000
Then divide the profit by the original investment:
$95,000 ÷ $330,000 = 0.287878...
Convert the decimal to a percentage:
0.287878 × 100 = 28.79%
Therefore C is correct.
The denominator matters. Because the question asks for the return or profit as a percentage of the purchase price, the original $330,000 investment is used as the base. Dividing $95,000 by the eventual $425,000 selling price would produce a different percentage and would not answer the question.
The calculation also deliberately ignores transaction costs. In an actual investment analysis, acquisition fees, financing expenses, repairs, taxes, carrying costs, commissions, closing costs, and capital improvements would materially change net profit.
Licensing examinations commonly test percentage gain and loss because the same mathematical principles apply to commissions, appreciation, capitalization, and financing calculations.
Study Guide Reference: Real Estate Calculations — Profit, Percentage Change and Investment Return.
