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You have accumulated $6,350 and are looking for the best rate of return that can be earned over the next year. A bank savings account
You have accumulated $6,350 and are looking for the best rate of return that can be earned over the next year. A bank savings account will pay 7%. A one-year bank certificate of deposit will pay 9%, but the minimum investment is $9,350. Required: a. Calculate the amount of return you would earn if the $6,350 were invested for one year at 7%. b. Calculate the net amount of return you would earn if $3,000 were borrowed at a cost of 17%, and then $9,350 were invested for one year at 9%. c. Calculate the net rate of return on your investment of $6,350 if you accept the strategy of part b. (Round your answer to 2 decimal places.) a. Amount of return $ 445 b. Net amount of return c. Net rate of return %
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