Answer:
40/500 = 8%
Step-by-step explanation:
40/500 = 8%
So the answer is 8%/year. The question is if the $40 is reinvested, then will the following year's return be 8% of $540 is $43.20? If it were, this would be an example of compound returns is getting interest (or a return) on the previously earned interest. That's an 8% per annum simple yield. You'd be better off finding something that compounded your investment.
