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Exercise 3-11 (Algo) Compare investment alternatives LO 3-2 Your friend has two investment opportunities that she is considering and has asked for your advice regarding h proceed. One will have an 12.0% rate of return on an investment of $580; the other will have a 15.0 % rate of reta of $700. She would like to take advantage of the higher-yielding investment but has only $580 available. Required: What is the maximum rate of interest that your friend should be willing to pay to borrow the $120 needed to tak higher yield? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Maximum rate of interest

Exercise 3-11 (Algo) Compare investment alternatives LO 3-2 Your friend has two investment opportunities that she is considering and has asked for your advice regarding h proceed. One will have an 12.0% rate of return on an investment of $580; the other will have a 15.0 % rate of reta of $700. She would like to take advantage of the higher-yielding investment but has only $580 available. Required: What is the maximum rate of interest that your friend should be willing to pay to borrow the $120 needed to tak higher yield? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Maximum rate of interest

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Exercise 3-11 (Algo) Compare investment alternatives LO 3-2 Your friend has two investment opportunities that she is considering and has asked for your advice regarding how she should proceed. One will have an 12.0% rate of return on an investment of $580; the other will have a 15.0% rate of return on an investment of $700. She would like to take advantage of the higher-yielding investment but has only $580 available. Required: What is the maximum rate of interest that your friend should be willing to pay to borrow the $120 needed to take advantage of the higher yield? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Maximum rate of interest I%
Transcribed Image Text:Exercise 3-11 (Algo) Compare investment alternatives LO 3-2 Your friend has two investment opportunities that she is considering and has asked for your advice regarding how she should proceed. One will have an 12.0% rate of return on an investment of $580; the other will have a 15.0% rate of return on an investment of $700. She would like to take advantage of the higher-yielding investment but has only $580 available. Required: What is the maximum rate of interest that your friend should be willing to pay to borrow the $120 needed to take advantage of the higher yield? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Maximum rate of interest I%
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