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8 June, 10:50

A Ponzi scheme involves using new investment dollars to trick current investors into thinking they are earning high returns. If someone running a Ponzi scheme is bringing in new investors at a rate of 25% per year and stealing 10% of investments, what return could he pay investors? (Assume the money is never really invested.)

a) 15%

b) 20%

c) 25%

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  1. 8 June, 11:18
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    Answer: a) 15%

    Explanation:

    If an investor is bring in someone new at 25% and is stealing 10% of the investment, the return he could pay investors is (25-10%) which is 15%.
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