Which statement best describes the profit in an investment?

Which statement best describes the profit in an investment?

• A. The amount invested
• B. The amount of money made on an investment (not the original amount)
• C. The down payment
• D. The selling price

Answer: (B)

Profit is the money you actually gain from an investment after recovering your initial outlay. It equals what you receive from the investment minus what you originally invested (and any costs tied to buying, holding, or selling). That’s why describing profit as the amount of money made on an investment beyond the original amount is the best choice. The amount invested is the cost, not the profit. The down payment is just part of the purchase price, not the profit. The selling price is the total money received, but profit requires subtracting the original investment (and related costs) from that amount. For example, if you invest $100,000 and later sell for $120,000, the profit is $20,000 (ignoring other costs). Any additional income like rents would increase total profit, but the core idea remains: profit = return minus your initial outlay.

Profit is the money you actually gain from an investment after recovering your initial outlay. It equals what you receive from the investment minus what you originally invested (and any costs tied to buying, holding, or selling). That’s why describing profit as the amount of money made on an investment beyond the original amount is the best choice. The amount invested is the cost, not the profit. The down payment is just part of the purchase price, not the profit. The selling price is the total money received, but profit requires subtracting the original investment (and related costs) from that amount. For example, if you invest $100,000 and later sell for $120,000, the profit is $20,000 (ignoring other costs). Any additional income like rents would increase total profit, but the core idea remains: profit = return minus your initial outlay.