Investment One safe investment pays 8% per year,and a more risky investment pays 12% per year.a. How much must be invested in each account if aninvestor of $100,000 would like a return of $9000per year?b. Why might the investor use two accounts ratherthan put all the money in the 12% investment?
Investment One safe investment pays 8% per year,and a more risky investment pays 12% per year.a. How much must be invested in each account if aninvestor of $100,000 would like a return of $9000per year?b. Why might the investor use two accounts ratherthan put all the money in the 12% investment?
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 27P
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Investment One safe investment pays 8% per year,
and a more risky investment pays 12% per year.
a. How much must be invested in each account if an
investor of $100,000 would like a return of $9000
per year?
b. Why might the investor use two accounts rather
than put all the money in the 12% investment?
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