You have accumulated $7,350 and are looking 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 $10,350.

Required:

a. Calculate the amount of return you would earn if the $7,350 were invested for one year at 8%.

b. Calculate the net amount of return you would earn if $3,000 were borrowed at a cost of 18%, and then $10,350 were invested for one year at 10%. (Round intermediate calculations.)

c. Calculate the net rate of return on your investment of $7,350 if you accept the strategy of part b.(Round intermediate calculations. Round your answer to 2 decimal places.)