3.10

 

 Compare investment alternatives  You have accumulated $12,000 and are looking for the best rate of return that can be earned over the next year. A bank savings account will pay 5%. A one-year bank certificate of deposit will pay 8%, but the minimum investment is $15,000. Available $12,000
Minimum $15,000
rate 5.0%
deposit rate 8.0%
 
 a.  Calculate the amount of return you would earn if the $12,000 were invested for  one year at 5%
Amount Rate Return  
     
 b.  Calculate the net amount of return you would earn if $3,000 were borrowed at a cost of 15%, and then $15,000 were invested for one year at 8%. 
Borrow $ Borrow rate Borrow Interest  
     
Investment rate Return
     
Net Return    
 c.  Calculate the net rate of return on your investment of $12,000 if you accept the strategy of part b
Net Return      
Investment  
d.  In addition to the amount of investment required and the rate of return offered, what other factors would you normally consider before making an investment decision such as the one described in this exercise? 
 

Are you Looking for Quality and Plagiarism-Free Assignment Help? Get Trusted Help From the Most Skilled Writers at Homeworkmaven.com. Hire Your Personal Writer Today and Keep Up Your GPA this Semester.
275 words per page

You essay will be 275 words per page. Tell your writer how many words you need, or the pages.

12 pt Times New Roman

Unless otherwise stated, we use 12pt Arial/Times New Roman as the font for your paper.

Double line spacing

Your essay will have double spaced text. View our sample essays.

Any citation style

APA, MLA, Chicago/Turabian, Harvard, our writers are experts at formatting.

We Accept
Image 3