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Consider the following: Elon is a recent college graduate who has been working in a full-time position for company ABC for two years now. Recently,

Consider the following: Elon is a recent college graduate who has been working in a full-time position for company ABC for two years now. Recently, Elon has come up with a brilliant idea to start his own business, however he lacks the funding he needs to get started. His retired grandfather, Walter, offers to pitch in $200,000 to help Elon get started, but requests a 30% ownership in the company. Aunt Kaye also offers Elon $300,000 in funding. Kaye, however, wants to be paid back in one payment at the end of the year and charge an interest rate of 4%.

Consider the following for parts d) and e): After receiving the funding needed, Elon has a successful year. Elons business makes a profit of $300,000 in the first six months and $800,000 during the next six months. The business does not retain or invest any of the money.

  1. How much money does Kaye receive? What is her return?
  2. How much money does Walter receive? What is his return?

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