diff --git a/README.md b/README.md
index 9e06ba0e..052e5caf 100644
--- a/README.md
+++ b/README.md
@@ -40,6 +40,7 @@ npm run dev
 - [Platform Fee & Treasury Split Operations Guide](file:///c:/Users/HP/quicklendx-protocol/docs/contracts/platform-fee-ops.md): Admin operations playbook for managing fee rates, treasury rotation, and revenue splits.
 - `docs/RUNBOOK_INCIDENT_RESPONSE.md`: Operator playbook for unexpected contract behavior and incident-mode recovery.
 - `docs/INVESTOR_TIER.md`: How the investor risk score, tier, and investment limit are computed — math, thresholds, and worked examples.
+- `docs/KYC.md`: Business KYC vs investor KYC, what each gates.
 - `quicklendx-contracts/README.md`: Smart contract-specific documentation.
 - `quicklendx-contracts/docs/contracts/deterministic-time.md`: Smart contract deterministic ledger time semantics.
 - `quicklendx-backend/README.md`: Backend-specific documentation.
diff --git a/docs/KYC.md b/docs/KYC.md
new file mode 100644
index 00000000..b595a258
--- /dev/null
+++ b/docs/KYC.md
@@ -0,0 +1,39 @@
+# KYC Guide for Operators
+
+This document explains the two types of KYC (Know Your Customer) used in QuickLendX: Business KYC and Investor KYC. As an operator, you will manage both processes to ensure platform compliance.
+
+## Business KYC
+Business KYC is required for businesses that want to create invoices on the platform. It gates the ability to list invoices and receive funds.
+
+**What it gates:**
+- Creating new invoices
+- Receiving funds from investors
+- Updating business profile details
+
+**Concrete Example:**
+When a new business signs up, they cannot list an invoice until their KYC status is updated to `Verified`.
+```json
+{
+  "business_id": "B-12345",
+  "kyc_status": "Verified",
+  "max_invoice_limit": 50000
+}
+```
+
+## Investor KYC
+Investor KYC is required for users who want to fund invoices. It gates the ability to place bids and earn yields.
+
+**What it gates:**
+- Placing bids on invoices
+- Withdrawing funds
+- Viewing detailed business financials
+
+**Concrete Example:**
+An investor attempting to place a bid of $10,000 on an invoice will be blocked if their KYC status is `Pending`.
+```json
+{
+  "investor_id": "I-67890",
+  "kyc_status": "Verified",
+  "investment_limit": 100000
+}
+```
diff --git a/quicklendx-contracts/src/profits.rs b/quicklendx-contracts/src/profits.rs
index a78efb9e..5a097f0e 100644
--- a/quicklendx-contracts/src/profits.rs
+++ b/quicklendx-contracts/src/profits.rs
@@ -558,6 +558,15 @@ pub fn compute_yield(amount: i128, rate_bps: u32, duration_days: u32) -> i128 {
     numerator / (BPS_DENOMINATOR * 365)
 }
 
+/// Compute the expected return on a principal amount.
+///
+/// # Returns
+/// Total expected return (principal + yield)
+pub fn compute_expected_return(amount: i128, rate_bps: u32, duration_days: u32) -> i128 {
+    let yield_amount = compute_yield(amount, rate_bps, duration_days);
+    amount.max(0).saturating_add(yield_amount)
+}
+
 // ============================================================================
 // Tests
 // ============================================================================
diff --git a/quicklendx-contracts/src/test_compute_yield_props.rs b/quicklendx-contracts/src/test_compute_yield_props.rs
index 927b9b93..9328f119 100644
--- a/quicklendx-contracts/src/test_compute_yield_props.rs
+++ b/quicklendx-contracts/src/test_compute_yield_props.rs
@@ -12,7 +12,7 @@
 
 #[cfg(all(test, feature = "fuzz-tests"))]
 mod test_compute_yield_props {
-    use crate::profits::compute_yield;
+    use crate::profits::{compute_expected_return, compute_yield};
     use proptest::prelude::*;
 
     // Ranges chosen to stay well inside i128 bounds while exercising realistic
@@ -100,5 +100,21 @@ mod test_compute_yield_props {
             prop_assert_eq!(compute_yield(amount, rate_bps, 0), 0,
                 "zero duration must yield 0");
         }
+        // ── Expected Return ────────────────────────────────────────────────
+
+        #[test]
+        fn expected_return_is_non_negative_and_bounded(
+            amount in 0i128..MAX_AMOUNT,
+            rate_bps in 0u32..=MAX_RATE_BPS,
+            duration_days in 0u32..=MAX_DURATION_DAYS,
+        ) {
+            let er = compute_expected_return(amount, rate_bps, duration_days);
+            prop_assert!(er >= 0, "expected return must be non-negative");
+            
+            // Expected return must be bounded by the return at MAX_RATE_BPS
+            let max_er = compute_expected_return(amount, MAX_RATE_BPS, duration_days);
+            prop_assert!(er <= max_er, "expected return must be bounded by MAX_RATE");
+            prop_assert!(er >= amount, "expected return must be >= amount");
+        }
     }
 }