Purchase Solution

# Solve for maximum interest rate on borrowed funds

Not what you're looking for?

You have two investment opportunities. One will have a 9.0% rate of return on an investment of \$590; the other will have an 12.0% rate of return on principal of \$860. You would like to take advantage of the higher yielding investment but have only \$590 available.

What is the maximum rate of interest that you would pay to borrow the \$270 needed to take advantage of the higher yield? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Maximum rate of interest =

##### Solution Summary

Instructional notes and strategy given in attached. The expert solves for maximum interest rates on borrowed funds.

Solution provided by:
###### Education
• BSc, University of Virginia
• MSc, University of Virginia
• PhD, Georgia State University
###### Recent Feedback
• "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
• "Thank, this is more clear to me now."
• "Awesome job! "
• "ty"
• "Great Analysis, thank you so much"

##### Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

##### Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

##### Operations Management

This quiz tests a student's knowledge about Operations Management

##### Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media