Abe and Bea each have some money to invest in a CD (Certificate of Deposit). Abe has $5,000 and Bea has $20,000. Both are interested in making a 6-month investment at Synchrony Bank. The CD rates for Synchrony Bank (as of July 8, 2015) are as listed below. With 0.41% interest, Abe would get $5,010 in six months. With 0.50% interest, Bea would get $20,050 at the end of six months. If they pool their funds, they will be able to purchase a $25,000 CD, which pays a higher interest rate. The 0.60% interest will return $25,075 at the end of six months. Obviously, Abe gets back his $5,000 principle, and Bea gets back her $20,000 principle. How should the $75 interest be divided between the two of them
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Abe and Bea each have some money to invest in a CD (Certificate of Deposit). Abe has $5,000 and Bea has $20,000. Both are interested in ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
To promote economic growth, countries would most likely act so that inflation A. is eliminated B. remains at a high level C. remains at a low level D. is a negative number
Answers (2)
If you have a questioned item on your travel charge card bill, with whom do you first try to resolve it?
Answers (1)
Electronic payments can be made using the routing and account number and are processed at banks like regular checks. a. True b. False
Answers (1)
Suppose a potential home buyer is interested in taking a $500,000 mortgage loan that has a term of 30 years and a fixed mortgage rate of 5.25%.
Answers (1)
Variables that are based on some objective physical (gender, ethnicity), measurable (age, income), or other classification attribute (occupation) of prospective customers are used in which segmentation base? A. personality B. usage C. needs D.
Answers (1)
New Questions in Business
You have spent $1000 building a hot-dog stand based on estimates of sales of $2000. the hot-dog stand is nearly completed, but now you estimate total sales o be only $800. you can complete the hot-dog stand for another $300.
Answers (1)
Huish Awnings makes custom awnings for homes and businesses. The company uses an activity-based costing system for its overhead costs.
Answers (1)
The chase strategy involves A. matching the demand forecast exclusively through the use of overtime and undertime. B. maintaining a small workforce and relying heavily on overtime during peak periods. C.
Answers (1)
For each of the following pairs of investments, indicate which would always be preferred by a rational investor (assuming that these are the only investments available to the investor): a) Portfolio A r = 19% σ = 21% Portfolio B r = 15% σ =
Answers (1)
California residents Kate and Jennifer decide to make a "deal": Kate will sell Jennifer her new Dell laptop for $600, a steal since she paid over $1,000 for it. They both feel they've gotten a great deal.
Answers (1)