Lesson: Rate of Return vs. Cost

In this lesson, Nick Palazzolo, CPA, breaks down the foundational concepts of rate of return and cost, emphasizing the simplicity of understanding inflows and outflows. He provides a clear and easily graspable explanation on how to calculate the rate of return and the cost by using the inflows-outflows framework. Nick stresses the importance of these concepts not only for personal finance, like credit card interest and mortgage payments, but also for business decisions concerning investments in new factories or borrowing funds. He illustrates these ideas with straightforward examples and assures that understanding these basics will pave the way for tackling more complex financial topics on the exam.