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Rate of return and investment choice   Clare Jaccard has ​$10 comma 000


10,000 to invest. Because she is only 25 years​ old, she is not concerned about the length of the​ investment's life. What she is sensitive to is the rate of return she will earn on the investment. With the help of her financial​ advisor, Clare has isolated four equally risky​ investments, each providing a single amount at the end of its​ life, as shown in the following​ table, LOADING...

. All of the investments require an initial ​$10 comma 000

10,000 payment.

a. ​ Calculate, to the nearest​ 0.01%, the rate of return on each of the four investments available to Clare.

b.  Which investment would you recommend to​ Clare, given her goal of maximizing the rate of​ return?

a.  The annual rate of​ return, r​, on Investment A is

nothingA $16,600 6

B $31,700 15

C $16,100 4

D $25,500 10

​%. ​ (Round to two decimal​ places.)

Top Answer

Investment C has more Return. So Investment C should be... View the full answer

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