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An investor has accumulated $5,100 and is looking for the best rate of return that can be earned over the next year. A bank savings
An investor has accumulated $5,100 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 5%. A one-year bank certificate of deposit will pay 7%, but the minimum investment is $8,100. Required: a. Calculate the amount of return the investor would earn if the $5,100 were invested for one year at 5%. b. Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 15%, and then $8,100 were invested for one year at 7%. c. Calculate the net rate of return on the investment of $5,100 if the investor accepts the strategy of part b. Note: Round your
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