An investor has accumulated $5,150 and is looking for the best rate of return that can be earned over the next year. A bank savings account will pay 9%. A one-year bank certificate of deposit will pay 11%, but the minimum investment is $8,150.

Required:

Calculate the amount of return the investor would earn if the $5,150 were invested for one year at 9%.

Calculate the net amount of return the investor would earn if $3,000 were borrowed at a cost of 19%, and then $8,150 were invested for one year at 11%.

Calculate the net rate of return on the investment of $5,150 if the investor accepts the strategy of part b.

Note: Round your answer to 2 decimal places.