Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor has accumulated $ 7 , 7 0 9 and is lookinv for the best rate of return that can be earned over the

An investor has accumulated $7,709 and is lookinv for the best rate of return that can be earned over the next year. A bank savings account will pay 8%. A one-year bank certificate of deposit will pay 10%, but the minimum investment is $10,000.
A. Calculate the amount of return the investor would earn if the $7,700 were invested for one hear at 8%.
B. Calculate the net amount of return the investor woukd earn if $3,000 were borrowed at a cost of 18%, and then $10,700 were invested for one year at 10%.
C. Calculate the net rate of return on the investment of $7,700 if tge investir acceptabthe strategy of part b.
Round answer to 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

what is a peer Group? Importance?

Answered: 1 week ago