Annual rate is 2.67%.
Given payment is $240 each year and sale amount is $9,000.
Annual rate of return is to be computed.
The annual percentage rate is the interest earned by an amount charged to borrowers or paid to investors each year. APR is a number that shows the real yearly cost of money throughout the life of a loan or the revenue received on an investment.
The formula to compute the annual rate of return is given as:
Annual rate of return = Payment ÷ Sale amount
Now,
Annual rate of return = 240 ÷ 9,000
=2.67%
Hence, the annual rate of return is 2.67%.
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